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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
 
FORM
10-K
 
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For
the fiscal year ended March 31, 2024
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For
the transition period from _______________ to _______________
 
Commission
File Number: 001-40715
 
PetVivo
Holdings, Inc.
(Exact
name of registrant as specified in its charter)
 


Nevada
 
99-0363559

(State
    or other jurisdiction of
 
(I.R.S.
    Employer

incorporation
    or organization)
 
Identification
    No.)

 
 
 

5151
                                            Edina Industrial Blvd Suite 575
Edina,
    Minnesota
 
55439

 

(Address
    of principal executive offices)
 
(Zip
    Code)

 
(952)
405-6216
(Registrant’s
Telephone Number, Including Area Code)
 
Securities
registered under Section 12(b) of the Act:
 


Title
    of each class
 
Trading
    Symbol(s)
 
Name
    of each exchange on which registered

Common
    Stock
 
PETV
 
Nasdaq
    Stock Market Inc.

Warrants
 
PETVW
 
Nasdaq
    Stock Market Inc.

 
Securities
registered under Section 12(g) of the Act: None
 
Indicate
by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐
Yes ☒ No
 
Indicate
by check mark if registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
☐
Yes ☒ No
 
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
 
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). ☒ Yes ☐ No
 
Indicate
by check mark whether the registrant is a large accelerated file, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 


Large
    accelerated filer
☐
Accelerated
    filer 
☐

Non-accelerated
    filer
☒
Smaller
    reporting company 
☒

 
 
Emerging
    Growth Company
☒

 
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
 
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
 
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
 
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
 
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
 
As
of September 30, 2023, the aggregate market value of the registrant’s common stock held by non-affiliates was $20,563,529, based
on the closing price of the common stock on the Nasdaq Capital Market on such date.
 
As
of June 28, 2024, there were 19,904,852 shares of the issuer’s $.001 par value common stock issued and outstanding.
 
Documents
incorporated by reference. There are no annual reports to security holders, proxy information statements, or any prospectus filed pursuant
to Rule 424 of the Securities Act of 1933 incorporated herein by reference.
 

 
 

 
 

 
TABLE
OF CONTENTS
 


PART I
 

 
 

Item
    1.
Business
3

Item
    1A.
Risk Factors
14

Item
    1B.
Unresolved Staff Comments
22

Item IC.
Cybersecurity
22

Item
    2.
Properties
24

Item
    3.
Legal Proceedings
24

Item
    4.
Mine Safety Disclosures
24

 
 
 

PART II
 

 
 

Item
    5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
24

Item
    6.
Reserved
26

Item
    7. 
Management’s Discussion and Analysis of Financial Condition and Results of Operation
26

Item
    7A.
Quantitative and Qualitative Disclosures About Market Risk
29

Item
    8.
Financial Statements and Supplementary Data
30

Item
    9.
Changes And Disagreements with Accountants on Accounting And Financial Disclosure
30

Item
    9A.
Controls and Procedures
30

Item
    9B.
Other Information
31

Item
    9C.
Disclosures Regarding Foreign Jurisdictions that Prevent Inspection
31

 
 
 

PART III
 

 
 

Item
    10.
Directors, Executive Officers, and Corporate Governance
32

Item
    11.
Executive Compensation
36

Item
    12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
42

Item
    13.
Certain Relationships and Related Transactions And Director Independence
43

Item
    14.
Principal Accounting Fees and Services
45

 
 
 

PART IV
 

 
 

Item
    15.
Exhibits, Financial Statement Schedules
45

Item
    16. 
Form 10-K Summary
46

Item
    17.
Signatures
47

 
This
Annual Report on Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by those sections.
For more information, see “Cautionary Statement Regarding Forward-Looking Statements.”
 
As
used in this report, the terms “we,” “us,” “our,” “PetVivo,” and the “Company”
mean PetVivo Holding Company, Inc. and our consolidated wholly-owned subsidiaries, unless the context indicates another meaning.
 
The
information contained on or connected to our website is not incorporated by reference into this report.
 

2
 

 
Cautionary
Statement Regarding Forward-Looking Information
 
This
Annual Report of PetVivo Holdings, Inc. on Form 10-K contains forward-looking statements, particularly those identified with the
words, “anticipates,” “believes,” “expects,” “plans,” “intends,”
“objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known
at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth
under “Management’s Discussion and Analysis and Plan of Operations,” generally, and specifically therein under the
captions “Liquidity and Capital Resources” as well as elsewhere in this Annual Report on Form 10-K for our fiscal year ended March 31, 2024 (“fiscal 2024”). Actual events or
results may differ materially from those discussed herein. The forward-looking statements specified in the following information
have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable.
Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from
those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following
information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative,
industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in
developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the
assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion
is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions
relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to
update any such forward-looking statements.
 
PART
I
 
ITEM
1. BUSINESS
 
Overview
 
PetVivo
Holdings, Inc. (the “Company,” “PetVivo,” “we” or “us) is an emerging biomedical device company
focused on the manufacturing, commercialization, and licensing of innovative medical devices and therapeutics for animals. The Company
has a pipeline of seventeen products for the treatment of animals. A portfolio of twenty-two patents protects the Company’s biomaterials,
products, production processes and methods of use. The Company began commercialization of its lead product Spryng™ with OsteoCushion™
Technology, a veterinarian-administered, intraarticular injection for the management of lameness and other joint afflictions such as
osteoarthritis in dogs and horses, in the second quarter of its fiscal year ended March 31, 2022.
 
In
August 2021, we received net proceeds of approximately $9.7 million in a registered public offering (“Public Offering”)
of 2.5 million units at a public offering price of $4.50 per unit. Each unit consisted of one share of our common stock and one
warrant to purchase one share of our common stock at an exercise price of $5.625 per share. The shares of common stock and warrants
were transferable separately immediately upon issuance. In connection with the Public Offering, the Company’s common stock and
warrants were registered under Section 12(b) of the Exchange Act and began trading on The Nasdaq Capital Market, LLC
(“Nasdaq”) under the symbols “PETV” and “PETVW,” respectively.
 
The
Company was incorporated in March 2009 under Nevada law. The Company operates as one segment from its corporate headquarters in Edina,
Minnesota. For further information, see Note 1, Description of the Business, in the note to the consolidated financial statements
in Part II, Item 8.
 
Business
Description
 
The
Company is primarily engaged in the business of commercializing and licensing products in the veterinary market to treat and/or manage
afflictions of companion animals such as cats, dogs and horses. Most of our technology was developed for human biomedical applications,
and we intend to leverage the investments already expended in their development to commercialize treatments for horses and companion
animals in a capital and time-efficient way.
 

3
 

 
Many
of the Company’s products are derived from proprietary biomaterials that simulate a body’s cellular tissue by virtue of their
reliance upon natural protein and carbohydrate compositions which incorporate such “tissue building blocks” as collagen,
elastin, and proteoglycans such as heparin. Since these are naturally occurring in the body, we believe they have an enhanced biocompatibility
with living tissues compared to synthetic biomaterials such as those based upon alpha-hydroxy polymers (e.g PLA, PLGA, and the like),
polyacrylamides, and other “natural” biomaterials that may lack the multiple proteins incorporated into our biomaterials.
These proprietary protein-based biomaterials that are similar to the body’s tissue thus allowing integration and tissue repair
in long-term implantation in certain applications.
 
Our
initial product, Spryng™ is a veterinary medical device designed to help reinforce and/or augment articular cartilage tissue for
the management of lameness and other joint related afflictions, such as osteoarthritis, in horses and companion animals. Spryng™
is an intra-articular injectable product of biocompatible and insoluble particles that are slippery, wet-permeable, durable, and resilient
to enhance the force cushioning function of the synovial fluid and cartilage. The particles mimic natural cartilage in composition, structure,
and hydration. Multiple joints can be treated simultaneously. Our particles are comprised of collagen, elastin, and heparin, similar
components found in natural cartilage. These particles show an effectiveness to reinforce and/or augment the cartilage, which enhances
the functionality of the joint (e.g. provide cushion or shock-absorbing features to the joint and to provide joint lubricity).
 
Osteoarthritis,
a common inflammatory joint disease in both dogs and horses, is a chronic, progressive, degenerative joint disease that is caused by
a loss of synovial fluid and/or the deterioration of joint cartilage. Osteoarthritis affects approximately 14 million dogs and 1 million
horses in the $11 billion companion animal veterinary care and product sales market.
 
Despite
the market size, veterinary clinics and hospitals have very few treatments and/or drugs for use in treating osteoarthritis in dogs, horses,
and other pets. As there is no cure for osteoarthritis, current solutions treat symptoms, but do not manage the cause. The current treatment
for osteoarthritis in dogs generally consists of the use of nonsteroidal anti-inflammatory drugs (or “NSAIDs”) which are
approved to alleviate pain and inflammation but present the potential for side effects relating to gastrointestinal, kidney, and liver
damage and do not halt or slow joint degeneration. The Company offers an alternative to traditional treatments that only address the
symptoms of the affliction. our Spryng™ product addresses the affliction, loss of synovial fluid and/or the deterioration of joint
cartilage, rather than treating just the symptoms and, to the best of our knowledge, has elicited minimal adverse side effects in dogs
and horses. Spryng™-treated dogs and horses have shown an increase in activity even after they no longer are receiving pain medication
or other treatments. Other treatments for osteoarthritis include steroid and/or hyaluronic acid injections, which are used for treating
pain, inflammation and/or joint lubrication, but can be slow acting and/or short lasting.
 
We
believe Spryng™ is an optimal solution to safely improve joint function in animals for several reasons:
 


 
●
Spryng™
    addresses the underlying problems which relate to deterioration of cartilage causing bones to contact each other and a lack of synovial
    fluid. Spryng™ provides a biocompatible lubricious cushion to the joint, which establishes a barrier between the bones, thereby
    protecting the remaining cartilage and bone.

 
●
Spryng™
    is easily administered with the standard intra-articular injection technique. Multiple joints can be treated simultaneously.

 
●
Case
    studies indicate many dogs and horses have long-lasting multi-month improvement in lameness after having been treated with Spryng™.

 
●
After
    receiving a Spryng™ injection, many canines are able to discontinue the use of NSAID’s, eliminating the risk of negative
    side effects.

 
●
Spryng™
    is an effective and economical solution for treating osteoarthritis. A single injection of Spryng™ is approximately $600 to
    $900 per joint and typically lasts for at least 12 months.

 
Historically,
drug sales represent up to 30% of revenues at a typical veterinary practice (Veterinary Practice News). Revenues and margins at veterinary
practices are being eroded because online, big-box, and traditional pharmacies have recently started filling veterinary prescriptions.
Veterinary practices are looking for ways to replace lost prescription revenues with safe and effective products. Spryng™ is a
veterinarian-administered medical device that should expand practice revenues and margins. We believe that the increased revenues and
margins provided by Spryng™ will accelerate its adoption rate and propel it forward as the standard of care for canine and equine
lameness related to or due to synovial joint issues.
 

4
 

 
We
commenced sales of Spryng™ in the second quarter of fiscal 2022 and plan to increase our commercialization efforts of Spryng™
in the United States through the use of sales reps, clinical studies and market awareness to educate and inform key opinion leaders on
the benefits of Spryng™.
 
We
entered into a Distribution Services Agreement (“Distribution Agreement”) with MWI on June 17, 2022. Pursuant to the Agreement,
we appointed MWI to distribute, advertise, promote, market, supply, and sell the Company’s lead product, Spryng™ on an exclusive
basis for two (2) years within the United States (the “Territory”), transitioning to a non-exclusive basis thereafter; provided
however that the Company shall extend the exclusivity for an additional one (1) year if MWI achieves certain performance targets agreed
upon by the parties. The Company can continue to sell Spryng™ within the Territory to established accounts, which include: (a)
customers who have purchased Spryng™ from the Company prior to the date of the Agreement, (b) customers who require that they deal
directly with the Company, (c) governmental agencies, and (d) customers that order via the internet who are not directly solicited by
MWI to purchase Spryng™. All customers must be licensed veterinary practices.
 
In
December 2023, the Company and MWI agreed to change the Distribution Agreement from an exclusive distribution agreement to a non-exclusive
distribution agreement, effective as of January 1, 2024. This is consistent with the Company’s strategy to create multiple sales
channels for its products. In December 2023, the Company entered into a non-exclusive distribution agreement with Covetrus North America,
LLC (“Covetrus Distribution Agreement”), to market, distribute and sell the Company’s products in the United States,
including the District of Colombia. The Covetrus Distribution Agreement has an initial term of one year, which will be automatically
renewed, unless either party provides notice of non-renewal at least thirty 30 days prior to the expiration of the term.
 
Spryng™
is classified as a veterinary medical device under the United States Food and Drug Administration (“FDA”) rules and
pre-market approval is not required by the FDA. Spryng™ completed a safety and efficacy study in rabbits in 2007. Since that
time, more than 2,000 horses and dogs have been treated with Spryng™. We entered into a clinical trial services agreement with
Colorado State University on November 5, 2020. This university clinical study was completed in March 2024. Additionally, the Company
successfully completed an equine tolerance study in March 2022 and began a two canine clinical study with Ethos Veterinary Health,
the first beginning in May of 2022 which was completed in October 2023, and the second began in June of 2023 with an expected
completion in October 2024. We anticipate these and other studies that we plan to initiate will be primarily used to expand our
distribution outlets since the large international and national distributors generally require a third-party university study and
other third-party studies prior to including a product in their catalog of products.
 
We
manufacture our products in an ISO 7 certified clean room manufacturing facility in Minneapolis using our patented and scalable self-assembly
production process, which minimizes the infrastructure requirements and manufacturing risks to deliver a consistent, high-quality product
while being responsive to volume requirements. A second ISO cleanroom facility is expected to be operational later this year. We believe
that having two manufacturing facilities will help us minimize supply risks, allow for continued scaling or our production capacity,
and expand our research and development facilities.
 
We
also have a pipeline that includes several therapeutic devices for both veterinary and human clinical applications. Some such devices may
be regulated by the FDA or other equivalent regulatory agencies, including but not limited to the Center for Veterinary Medicine (“CVM”).
We anticipate growing our product pipeline through the acquisition or in-licensing of additional proprietary products from human medical
device companies specifically for use in pets. In addition to commercializing our own products in strategic market sectors and in view
of the Company’s vast proprietary product pipeline, the Company may establish strategic out-licensing partnerships to provide secondary
revenues.
 

5
 

 
Product
Pipeline
 

 
Below
is a listing of applications of our technology that we plan to commercialize or out-license to strategic partners:
 
Dermal
Filler
 
Our
biomaterials are constructed from purified water, protein, and carbohydrate, tailored to simulate different body tissues that biologically
integrate (bio-integration). Our biomaterials can be manufactured and used as a dermal filler for wrinkle treatment by injection. These
formed, gel particles fill, integrate and rejuvenate dermal skin tissue to remove the wrinkle. This product was taken through an FDA
clinical trial under the name CosmetaLife®, see the results here: www.clinicaltrials.gov (NCT00414544).
 
Cardiovascular
Devices
 
Our
blood-compatible biomaterial, which allows blood contact and bio-integrative processes to occur without clotting, platelet attachment,
or thrombogenesis, is used to repair cardiovascular tissue. VasoGraft®, a blood vessel graft made from VasoCover™ material,
is designed to mimic natural blood vessel tissue in almost every respect, including the components used.
 
Drug
Delivery
 
Unique
fabrication techniques allow us to homogeneously distribute the drug in milligram to nanogram amounts, resulting in optimum performance
and manufacturing capabilities for a variety of delivery methods, such as coatings, injectables, implantables, or transmucosal delivery.
The first planned transmucosal product has been optimized and tested with peptide drugs with better efficacy than oral dosing via swallowing.
 
Orthopedic
Devices
 
Another
of our materials can be used in a variety of shapes for orthopedic and dental applications. The first products, OrthoGelic™ and
OrthoMetic™, will be aimed at difficult-to-heal, non-union broken bones, by using particles to fill the empty space. The orthopedic
biomaterial, made to mimic the structural components of bone, can allow integration and healing to fill in the break and exclude non-bone
tissue infiltration.
 

6
 

 
Intellectual
Property
 
Our
intellectual property portfolio is comprised of patents, patent applications, trademarks, and trade secrets. We have issued ten United
States Patents. In addition to the United States patent portfolio, we also have nine patents granted in key markets around the world
including Canada, Australia, and countries within the European Union.
 
We
believe we have developed a broad and deep patent portfolio around our biomaterials and manufacturing processes in addition to the application
of these biomaterials for use as medical devices, medical device coatings, and pharmaceutical delivery devices. The Company secures other
technological know-how by trade secret law and also possesses several trademarks that are either registered or protected pursuant to
trademark common law.
 
United
States Patents:
 

●10,967,104
                                            – Encapsulated or Coated Stent Systems

●10,850,006
                                            – Protein Biomaterials and Bioacervates and Methods of Making and Using Thereof

●10,744,236
                                            - Protein Biomaterial and Biocoacervate Vessel Graft Systems and Methods of Making and
                                            Using Thereof

●10,016,534
                                            – Protein Biomaterial and Biocoacervate Vessel Graft Systems and Methods of Making
                                            and Using Thereof

●9,999,705
                                            – Protein Biomaterials and Bioacervates and Methods of Making and Using Thereof

●9,107,937
                                            – Wound Treatments with Crosslinked Protein Amorphous Biomaterials

●8,623,393
                                            – Biomatrix Structural Containment and Fixation Systems and Methods of Use Thereof

●8,529,939
                                            – Mucoadhesive Drug Delivery Devices and Methods of Making and Using Thereof

●8,465,537
                                            – Encapsulated or Coated Stent Systems

●8,153,591
                                            – Protein Biomaterials and Biocoacervates and Methods of Making and Using Thereof
 
We
have been granted 9 foreign patents in certain jurisdictions. We have 7 patent applications pending in the US and certain foreign jurisdictions.
 
To
maximize the strength and value of our patent portfolio, many of the claims use the transitional term “comprising”, which
is synonymous with “including,” This use of transitional language is inclusive or open-ended and does not exclude additional,
unrecited elements or method steps. Our patents also include method claims covering many of the applications and uses of the biomaterials
as medical devices and drug delivery systems. We believe our intellectual property portfolio strongly protects our proprietary technology,
including the composition of raw elements used to produce our formulations, the fabricated biomaterials, and their application in end
products, thereby making our material and devices much more attractive to industry partners.
 
We
will seek to protect our products and technologies through a combination of patents, regulatory exclusivity, and proprietary know-how.
Our goal is to obtain, maintain and enforce patent protection for our products, formulations, processes, methods, and other proprietary
technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the United
States and in other countries. Our policy is to actively seek to obtain, where appropriate, the broadest intellectual property protection
possible for our current compounds and any future compounds developed. We also strenuously protect our proprietary information and proprietary
technology through a combination of contractual arrangements, trade secrets, and patents, both in the United States and abroad. However,
even patent protection may not always afford us with complete protection against competitors who seek to circumvent our patents.
 
We
depend upon the skills, knowledge, and experience of our scientific and technical personnel, including those of our company, as well
as that of our advisors, consultants, and other contractors, none of which is patentable. To help protect our proprietary know-how, which
may not be patentable, and inventions for which patents may be difficult to obtain or enforce, we rely on trade secret protection and
confidentiality agreements to protect our interests. To this end, we generally require all of our employees, consultants, advisors, and
other contractors to enter into confidentiality agreements that prohibit disclosure of confidential information and, where applicable,
require disclosure and assignment of ownership to us the ideas, developments, discoveries, and inventions important to our business.
 

7
 

 
Companion
Animal Market
 
Over
the last several decades, we believe the animal health market and industry has a strong component in the overall U.S. economy and is
more resistant to economic cycles. The veterinary sector is an attractive area to participate in the growth of the broader healthcare
industry without reimbursement risk. The American Pet Products Association (APPA) 2021-2022 National Pet Owners Survey indicates that
$123.6 billion was spent on pets in the U. S. in 2021. Vet Care and product sales constitute about $34.3 billion of the market. The growth
in the U.S. companion animal market has been continuing to increase due to the increase in the number of pet-owning households.
 
The
APPA 2021-2022 National Pet Owners Survey indicates U.S. pet ownership reached record levels in 2022. Specifically, 70% of all U.S. households
owned a pet in 2022. That’s 90.5 million pet-owning households, up from 84.6 million in 2018. In 2022, dogs and cats were the most
popular pet species, owned by 69% and 45% of U.S. households, respectively. APPA also reported that there were 69.0 million dogs and
45.3 million cats in the U.S. APPA reported that 3.5% of U.S. households owned horses in 2022. According to the American Horse Council,
the total number of horses owned by U.S. households was 7.2 million.
 
Osteoarthritis
Market
 
Osteoarthritis,
the most common inflammatory joint disease in both dogs and horses, is a progressive condition that is caused by a deterioration of joint
cartilage. Over time, the joint cartilage deterioration creates joint stiffness from mechanical stress resulting in inflammation, pain,
and loss of range of motion, which may be referred to as lameness. Osteoarthritis joint stiffness and lameness worsen with time from
gradual cartilage degeneration and an ongoing loss of protective cushion and lubricity (i.e., loss of slippery padding). As there is
no cure for osteoarthritis, the various treatment methods are focused on managing the related symptoms of pain and inflammation. Veterinarians
recommend several treatments depending on the severity of the disease, including a combination of rest, weight loss, physical rehabilitation,
and a regimen of pain and anti-inflammatory drugs (NSAIDs). Non-steroidal anti-inflammatory drugs (NSAIDs) are used to alleviate the
pain and inflammation caused by OA, but long-term NSAIDs cause gastric problems. Moreover, NSAIDs do not treat the cartilage degeneration
issue to halt or slow progression of the OA condition.
 
The
Morris Animal Foundation estimates that OA affects approximately 14 million adult dogs in the U.S. and owners consistently report it
as a top concern.
 
Horse
Osteoarthritis (Lameness)
 
Equine
osteoarthritis is the most common cause of lameness in horses. Equine OA is expensive to manage,
with estimated annual costs as high as $10,000-15,000 per horse to diagnose, treat, and medicate, researchers found in one study as referenced
in the Horse – Equine Monthly.
 
As
noted previously, the American Horse Council reported the total number of horses owned by U.S. households was 7.2 million. According
to an annual National Equine Health Survey conducted in collaboration with the British Equine Veterinary Association in 2016, 26% of
horses suffered from lameness. As referenced in the Horse–Equine Monthly, studies show 60% of all lameness issues are related to
OA. Based on the above assumptions we calculate that there are approximately 1.1 million horses suffering from OA.
 
Distribution
 
Most
U.S. veterinarians buy a majority of their equipment and supplies from a preferred distributor. More than 75% of veterinarians name Covetrus
North America/Butler Schein Animal Health, Inc., Patterson Veterinary, MWI, Midwest Veterinary Supply, Inc., or Victor Medical Company
as their preferred distributor. Combined, these top-tier distributors sell more than 85%, by revenue, of the products sold to companion
animal veterinarians in the U.S. Covetrus, Patterson, and MWI are recognized by manufacturers, distributors, and veterinarians as the
pre-eminent national companion animal veterinary supply distributors in the US. There are no other distributors that provide equivalent
levels of service to manufacturers and regularly visit veterinarians in as wide a geographic area as Covetrus, Patterson or MWI. Midwest
and Victor are large, regional distributors. The above data in this paragraph was sourced from File No. 101 0023 at the U.S. Federal
Trade Commission.
 

8
 

 
We
commenced sales of SpryngTM in the second quarter of fiscal 2022 and plan to increase our commercialization efforts of SpryngTM
in the United States through our distribution relationship with MWI Veterinary Supply Co. (“Distributor” or “MWI”)
and the use of sales reps, clinical studies, and market awareness to educate and inform key opinion leaders on the benefits of SpryngTM.
 
We
currently have distribution agreements with MWI and Covetrus, two of the pre-eminent national companion animal veterinary supply distributors
in the U.S. We also continue to sell directly to veterinarian practices.
 
Orthopedic
Joint Treatments
 
A
treatment for joint pain, which is made of injected, protein-based, biocompatible particles. In vivo studies indicate that the biocompatible
particle device can easily be combined with synovial fluid in a rabbit knee to form a joint cushion, buffering the adjacent bones/cartilage
where no damage was caused to the cartilage from replacing the synovial fluid. The particles show an effectiveness to augment and reinforce
the tissue, cartilage, ligaments and/or bone and/or enhance the functionality of the joint (e.g. reinforce deteriorated components present
in the joint to provide cushion or shock-absorbing features to the joint and to provide joint lubricity).
 
AppTec
Laboratories accomplished a gel-particle rabbit study. In short, New Zealand white rabbits (6) were injected in both stifle joints (knees)
to fill but not extend the synovial space (~0.5 cc GDP/site). Rabbits were tested every other day for abnormal clinical signs including
range of motion and joint observations until sacrifice. Behavioral testing revealed no abnormal scores for range of motion, withdrawal
response, or joint observations (all animals were 100% normal). At one week and at four weeks the animals were sacrificed. AppTec pathologists
evaluated knee joint histology. The reported cartilage surfaces of the femoral and tibia condyles and the menisci were grossly and histologically
100% normal for all animals and test sites. The test particles were found in all of the injection sites.
 
The
test particle did not cause changes in the articular cartilage of the femur or tibia when injected into the stifle joint of rabbits.
The test article and control rabbit knees were not different for either 1 or 4-week time points for all histological measurements. In
conclusion, the particles do not cause inflammation or damage to knee joint and will stick to exposed tissues and biologically integrate
with those tissues. The particles were not found to stick to articular cartilage in any sample.
 
Regenerative
Characteristics
 
The
particle devices for joint injections have been extensively studied for a broad range of applications including the treatment of wrinkles
as dermal filler. Here is an overview of the pre-clinical and clinical studies completed for CosmetaLife, which is the name used for
the particle device when it was used as a dermal filler.
 
CosmetaLife
is an easy-to-inject, water-protein-based dermal filler that not only fills nasolabial wrinkle depressions but also helps rejuvenate
the dermal tissues, counteracting damage that causes wrinkles. The dermal cells are attracted to the CosmetaLife gel-particles, attach
to them, and then slowly replace them with natural dermal material (extracellular matrix). The natural biological replacement process
of CosmetaLife to collagen is estimated to take 6-12 months. CosmetaLife clinical trial on nasolabial folds supports this estimate.
 
CosmetaLife
injections allow the body to create a more natural dermal structure in and around every particle. Enhancing the natural process of dermal
tissue construction with CosmetaLife allows for long-term dermal contouring, corrections, and rejuvenation with little to no adverse
side effects noted in clinical trials.
 

9
 

 
Particle
Device Clinical Studies
 
The
Company has conducted several biocompatibility animal studies. In the implantation study, no abnormal clinical signs were noted for any
of the rabbits. The results of the sensitization study in guinea pigs showed a sensitization response equivalent to the negative controls.
 
A
Food and Drug Administration (FDA) IDE approved pivotal human clinical trial began with CosmetaLife late in 2006. The clinical trial
was a randomized, double-blind, parallel assignment, multi-center comparison of the safety and efficacy of CosmetaLife versus Restylane®
(Control) for the correction of nasolabial folds. One hundred seventy-one patients were skin tested and 145 were treated at six trial
sites. The number of study exits after treatment totaled four subjects. This clinical trial was reported and published at www.clinicaltrials.gov
(NCT00414544).
 
The
feedback from physician investigators has been positive with respect to CosmetaLife injection qualities, cosmetic appearance, and its
feel to the touch. During the first three to four months of the study, CosmetaLife showed no decrease in efficacy, as compared to Restylane
which showed an 11 percent decrease in efficacy. The FDA/IDE approved human clinical trial for the CosmetaLife product through twelve
months was found to be the same as compared to control hyaluronic acid product, Restylane (for each interval the consensus of the blinded
subjects tested preferred CosmetaLife or showed no preference at 3, 6, 9 and 12 months).
 
We
use existing, scalable processes to reduce the infrastructure requirements and manufacturing risks to deliver a consistent, high-quality
product while being responsive to volume requirements. We are able to scale the manufacturing process having made batches in up to 2.0-kilogram
quantities to near GMP (Good Manufacturing Practices) standards.
 
Particles
Safety Study
 
Patients
injected with CosmetaLife were found to have no or mild inflammatory, irritation, or immunogenic responses. These results suggest the
particles are biocompatible because it closely matches the skin structure, composition, and moisture content. The no-to-low immunogenic
responses are attributed to the tight cross-linking of the CosmetaLife matrix, which prevents immunogenic progenitor cells from producing
antibodies to the matrix.
 
In
the clinical trial, the incidence of possible reaction to a skin test was 2.55 percent, with only one subject showing a reaction to a
second test or 0.6%, (1 out of 171). We also have a study report by AppTec, Inc., our Contract Research Organization, that CosmetaLife
did not produce an antibody response during the clinical trial further supporting our belief that it is safe to use.
 
CosmetaLife
is composed of materials that approximately meet the Generally Regarded As Safe (GRAS) requirements of the FDA. CosmetaLife contains
materials from certified bovine and porcine tissue sources that do not harbor prion disease or BSE. Additionally, steps in the manufacturing
process have been validated for deactivating all viruses.
 
Extrusion
force testing and the Clinical Trial usage both demonstrate the consistent and easy injection of CosmetaLife. Twenty-five month stability
testing shows that CosmetaLife is stable at room temperature conditions. Moreover, CosmetaLife has been shown to be stable at 40 °C
(104 °F) conditions for at least 3 months.
 
Competition
 
The
development and commercialization of new animal health medicines is highly competitive, and we expect considerable competition from major
pharmaceutical, biotechnology, and specialty animal health medicines companies. As a result, there are, and likely will continue to be,
extensive research and substantial financial resources invested in the discovery and development of new animal health medicines. Our
potential competitors include large animal health companies, such as Zoetis, Inc.; Merck Animal Health, the animal health division of
Merck & Co., Inc.; Merial, the animal health division of Sanofi S.A.; Elanco, the animal health division of Eli Lilly and Company;
Bayer Animal Health, the animal health division of Bayer AG; NAH, the animal health division of Novartis AG; Boehringer Ingelheim Animal
Health, the animal health division of Boehringer Ingelheim GmbH; Virbac Group; Ceva Animal Health; Vetoquinol and Dechra Pharmaceuticals
PLC. We are also aware of several smaller early stage animal health companies, such as Kindred Bio, Aratana Therapeutics Inc. (recently
acquired by Elanco), NextVet and VetDC that are developing products for use in the pet therapeutics market.
 

10
 

 
Regulation
– Human and Veterinary Use
 
Our
lead product, Spryng™ and other medical devices that we may manufacture for both veterinary and human applications are subject to regulation by numerous regulatory bodies, including the FDA and comparable
international regulatory agencies. These agencies require manufacturers of medical devices to comply with applicable laws and
regulations governing the development, testing, manufacturing, labeling, marketing, and distribution of medical devices. Medical
devices are generally subject to varying levels of regulatory control, the most comprehensive of which requires that a clinical
evaluation program be conducted before a device receives approval for commercial distribution.
 
Veterinary
Use

 
We would need to obtain specific permission from the FDA to distribute a new device in the United States and we expect that some form of marketing authorization will be necessary for our devices. Marketing authorization is generally
sought and obtained in one of two ways. The first process requires that a pre-market notification (510(k) Submission) be made to the
FDA to demonstrate that the device is as safe and effective as, or “substantially equivalent” to, a legally marketed device
that is not subject to pre-market approval (“PMA”). A legally marketed device is a device that (i) was legally marketed prior
to May 28, 1976, (ii) has been reclassified from Class III to Class II or I, or (iii) has been found to be substantially equivalent to
another legally marketed device following a 510(k) Submission. The legally marketed device to which equivalence is drawn is known as
the “predicate” device. Applicants must submit descriptive data and, when necessary, performance data to establish that the
device is substantially equivalent to a predicate device. In some instances, data from human clinical studies must also be submitted
in support of a 510(k) Submission. If so, this data must be collected in a manner that conforms with specific requirements in accordance
with federal regulations including the IDE and Human Subjects Protections or “Good Clinical
Practice” regulations.
 
After the 510(k) application is submitted, the applicant cannot market the device unless FDA issues “510(k)
clearance” deeming the device substantially equivalent. After an applicant has obtained clearance, the changes to existing devices
covered by a 510(k) Submission that do not significantly affect safety or effectiveness can generally be made without additional 510(k)
Submissions, but evaluation of whether a new 510(k) is needed is a complex regulatory issue, and changes must be evaluated on an ongoing
basis to determine whether a proposed change triggers the need for a new 510(k), or even PMA. The 510(k) clearance pathway is not available
for all devices: whether it is a suitable path to market depends on several factors, including regulatory classifications, the intended
use of the device, and technical and risk-related issues for the device.
 
The
second, more rigorous, process requires that an application for PMA be made to the FDA to demonstrate that the device is safe and effective
for its intended use as manufactured. This approval process applies to most Class III devices. A PMA submission includes data regarding
design, materials, bench and animal testing, and human clinical data for the medical device. Again, clinical trials are subject to extensive
FDA regulation. Following completion of clinical trials and submission of a PMA, the FDA will authorize commercial distribution if it
determines there is reasonable assurance that the medical device is safe and effective for its intended purpose. This determination is
based on the benefit outweighing the risk for the population intended to be treated with the device. This process is much more detailed,
time-consuming, and expensive than the 510(k) process. Also, FDA may impose a variety of conditions on the approval of a PMA.
 

11
 

 
Both
before and after a device for the U.S. market is commercially released, we would have ongoing responsibilities under FDA regulations.
The FDA reviews design and manufacturing practices, labeling and record keeping, and manufacturers’ required reports of adverse
experiences and other information to identify potential problems with marketed medical devices. We would also be subject to periodic
inspection by the FDA for compliance with the FDA’s quality system regulations, which govern the methods used in, and the facilities
and controls used for, the design, manufacture, packaging, and servicing of all finished medical devices intended for human use. In addition,
the FDA and other U.S. regulatory bodies (including the Federal Trade Commission, the Office of the Inspector General of the Department
of Health and Human Services, the Department of Justice (DOJ), and various state Attorneys General) monitor the manner in which we promote
and advertise our products. Although physicians are permitted to use their medical judgment to employ medical devices for indications
other than those cleared or approved by the FDA, we are prohibited from promoting products for such “off-label” uses and
can only market our products for cleared or approved uses. If the FDA were to conclude that we are not in compliance with applicable
laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health risk, the FDA could require us
to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health, order
a recall, repair, replacement, or refund of such devices, detain or seize adulterated or misbranded medical devices, or ban such medical
devices. The FDA may also impose operating restrictions, enjoin and/or restrain certain conduct resulting in violations of applicable
law pertaining to medical devices, including a hold on approving new devices until issues are resolved to its satisfaction, and assess
civil or criminal penalties against our officers, employees, or us. The FDA may also recommend prosecution to the DOJ. Conduct giving
rise to civil or criminal penalties may also form the basis for private civil litigation by third-party payers or other persons allegedly
harmed by our conduct.
 
The
delivery of our devices in the U.S. for human use would be subject to regulation by the U.S. Department of Health and Human Services and comparable
state agencies responsible for reimbursement and regulation of healthcare items and services. U.S. laws and regulations are imposed primarily
in connection with the Medicare and Medicaid programs, as well as the government’s interest in regulating the quality and cost
of health care.
 
Federal
healthcare laws apply when we or customers submit claims for items or services that are reimbursed under Medicare, Medicaid, or other
federally funded healthcare programs. The principal federal laws include: (1) the False Claims Act which prohibits the submission of
false or otherwise improper claims for payment to a federally-funded health care program; (2) the Anti-Kickback Statute which prohibits
offers to pay or receive remuneration of any kind for the purpose of inducing or rewarding referrals of items or services reimbursable
by a Federal health care program; (3) the Stark law which prohibits physicians from referring Medicare or Medicaid patients to a provider
that bills these programs for the provision of certain designated health services if the physician (or a member of the physician’s
immediate family) has a financial relationship with that provider; and (4) health care fraud statutes that prohibit false statements
and improper claims to any third-party payer. There are often similar state false claims, anti-kickback, and anti-self-referral and insurance
laws that apply to state-funded Medicaid and other health care programs and private third-party payers. In addition, the U.S. Foreign
Corrupt Practices Act can be used to prosecute companies in the U.S. for arrangements with physicians, or other parties outside the U.S.
if the physician or party is a government official of another country and the arrangement violates the law of that country.
 
The
laws that are applicable to us are subject to change, and subject to evolving interpretations. If a governmental authority were to
conclude that we are not in compliance with applicable laws and regulations, we and our officers and employees could be subject to
severe criminal and civil penalties including substantial fines and damages, and exclusion from participation as a supplier of
product to beneficiaries covered by Medicare or Medicaid.
 
International
Sales
 
At
the present time, we are not selling any products outside the United States. If we were to commence sales internationally, we would setup
a marketing and compliance program dedicated to our international sales.

 
The
process of obtaining clearance to market products in countries outside the United States is costly and time-consuming. Countries
around the world have recently adopted more stringent regulatory requirements, which are expected to add to the delays and
uncertainties associated with selling Spryng™ or other new products internationally, as well as the clinical and
regulatory costs of supporting these products. In addition, regulations regarding the development, manufacture, and sale of medical
devices are subject to future change. We cannot predict what impact, if any, those changes might have on our business. If we begin
selling our products internationally, failure to comply with these regulatory requirements could have a material adverse effect on
our business, financial condition, and results of operations.
 

12
 

 
Research
and Development
 
The
Company is currently pursuing advancements in the composition, methods of manufacture and use for its proprietary biomaterials. It is
anticipated that within the next twelve months the Company will pursue additional third-party studies related to the use of Spryng™
for the treatment of osteoarthritis in canine and equine patients. The Company also anticipates that resources will be expended
to advance and improve the manufacturing systems for Spryng™ that will increase product volume and overall efficiency.
Finally, the Company anticipates that research and testing will be conducted in the next eighteen months involving the existing Spryng™
formulation and other variations to identify and determine the next commercial product(s) that may be administered to the digital
cushion of horses for the treatment of navicular disease.
 
Employees
and Human Capital
 
As
of June 28, 2024, we have 20 employees. We also engage outside consultants to assist with research and development, clinical development
and regulatory matters, investor relations, operations, and other functions from time to time.
 
The
Company believes that its success depends on the ability to attract, develop, and retain key personnel. It also believes that the skills,
experience, and industry knowledge of its employees significantly benefit its operations and performance. The Company believes that it
offers competitive compensation and other means of attracting and retaining key personnel. None of our employees are represented by a
labor union and we believe that our relationships with our employees are good.
 
Available
Information
 
We
make available, free of charge and through our Internet website at www.petvivo.com, our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, and any amendments to any such reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with,
or furnish it to, the Securities and Exchange Commission (“SEC”). Reports filed with the SEC also may be viewed at www.sec.gov.
We include our website throughout this report for reference only. The information contained on or connected to our website is not incorporated
by reference into this report.
 

13
 

 
ITEM
1A. RISK FACTORS
 
An
investment in our common stock and warrants involves a high degree of risk. You should carefully consider the following described risks
together with all other information included in this prospectus before making an investment decision with regard to this offering. If
one or more of the following risks occurs, our business, financial condition, and results of operations could be materially harmed, which
most likely would result in a decline in the trading price of our common stock and warrants and investors losing part or even all of
their investment.
 
Risks
Relating to Our Financial Condition
 
The
Company’s failure to meet the continued listing requirements of The Nasdaq Capital Market will most likely result in the
Company’s securities being delisted from Nasdaq.
 
Our
common stock and warrants are currently listed for trading on Nasdaq. On November 17, 2023, the Company received a letter from Nasdaq
stating that the Company no longer meets the minimum $2.5 million stockholders’ equity requirement as of September 30, 2023, and
that the continued listing of its securities is no longer warranted. Pursuant to Nasdaq Rules, the Company filed an appeal of this decision
and the hearing date occurred on February 13, 2024. There can be no assurances that the Company will successfully appeal the delisting
determination and receive an extension of time to demonstrate compliance with the Nasdaq stockholder equity rules.
 
If the Company’s
securities are delisted from Nasdaq, it would likely have a negative effect on the price of the Company’s common stock and may
impair a stockholder’s ability to sell or purchase shares of our common stock. In addition, delisting could impair our ability
to raise additional capital.
 
We
have incurred substantial losses to date and could continue to incur such losses.
 
We
have incurred substantial losses since commencing our current business. For the year ended March 31, 2024, we lost approximately
$11.0 million and had an accumulated deficit of approximately $82.8 million. In order to achieve and sustain future revenues, we
must succeed in our current efforts to commercialize Spryng™ for treatment of dogs, cats and horses suffering from
osteoarthritis. That will require us to produce our products effectively in commercial quantities, establish adequate sales and
marketing systems, conduct clinical trials and tests which show the safety and efficacy of Spryng™ in dogs and horses and gain
significant support from veterinarians in the use of our products. We expect to continue to incur losses until such time, if ever,
as we succeed in significantly increasing our revenues and cash flow beyond what is necessary to fund our ongoing operations and pay
our obligations as they become due. We may never generate revenues sufficient to become profitable or to sustain
profitability.
 
If
we are unable to obtain sufficient funding, we may have to reduce materially or even discontinue our business.
 
As
of March 31, 2024, we have cash or cash equivalents of approximately $87,000. Beginning on April 9, 2024, and ending on June 28, 2024,
the Company raised $1,622,600 pursuant to the private offering of units to accredited investors. With these proceeds, along with an additional
$750,000 of equity and/or debt proceeds, we anticipate that we will be adequate to satisfy operational and capital requirements through the end of 2024. If we are unable to realize substantial revenues in the near future, we will need to seek additional financing
beyond this three-month period to continue our operations. We also most likely will require additional financing to develop additional
new products or to expand into foreign markets. Accordingly, our ability to commercialize Spryng™ and other products may be dependent
on our receipt of the net proceeds from our future financings.
 
Along
with establishing effective production, marketing, sales, and distribution of Spryng™ and other products, we believe that our future
capital requirements depend upon the timing and costs of many factors with some of them beyond our control, including our ability to
establish an adequate base of veterinarian clinics using our products, costs in obtaining patents and any required regulatory approvals
for future products, costs of any future target animal studies, costs related to new product development, costs of finished product inventory,
expenses to attract and retain skilled personnel as needed, increased costs related to being a listed public company, and the costs of
any future acquisitions of existing companies or IP technologies. There is no assurance that future additional capital will be available
to us as needed, or if available upon terms acceptable to us.
 

14
 

 
Risks
Relating to Our Business and Industry
 
We
have a limited operating history upon which to base an evaluation of our business prospects.
 
We
were incorporated in March 2009 and have a limited operating history upon which to base an evaluation of our business prospects. We did
not begin generating notable revenues from the sale of Spryng™ until the second quarter of fiscal 2023. Our limited operating history
makes an evaluation of our business and prospects very difficult. Our prospects must be considered speculative, especially considering
the risks, expenses, and difficulties frequently encountered in the establishment of an early-stage company. Our ability to operate our
business successfully remains unknown and untested. If we cannot commercialize our products effectively, or are significantly delayed
or limited in doing so, our business and operations will be harmed substantially, and we may even need to cease operations.
 
We
are substantially dependent upon the success of Spryng™ and any failure of Spryng™ to achieve market acceptance would harm
us significantly.
 
We
have one lead product, Spryng™, which is in commercial production. Our future prospects rely heavily on the successful marketing
of this product. In addition to establishing effective production, marketing, sales, distribution and training for the use of Spryng™,
we believe its successful commercialization will depend on other material factors including our ability to educate and convince veterinarians
and pet owners about the benefits, safety and effectiveness of Spryng™, the occurrence and severity of any side effects to pets
from use of our products, maintaining regulatory compliance and effective quality control for our products, our ability to maintain and
enforce our patents and other intellectual property rights, any increased manufacturing costs from third-party contractors or suppliers,
and the availability, cost and effectiveness of treatments offered by competitors.
 
Our
lead product, Spryng™, will face significant competition in our industry, and our failure to compete effectively may prevent us
from achieving any significant market penetration.
 
The
development and commercialization of animal care products is highly competitive, including significant competition from major pharmaceutical,
biotechnology, and specialty animal health medical companies. Our competitors include Zoetis, Inc.; Merck Animal Health, the animal health
division of Merck & Co., Inc.; Merial, the animal health division of Sanofi, S.A.; Elanco, the animal health division of Eli Lilly
and Company; Bayer Animal Health, the animal health division of Bayer AG; Novartis Animal Health, the animal health division of Novartis
AG; Boehringer Ingelheim Animal Health; Virbac Group; Ceva Animal Health; Vetaquinol; and Dechra Pharmaceuticals PLC. There also are
several smaller stage animal health companies that have recently emerged in our industry and are developing therapeutics products that
may compete with Spryng™, including Kindred Bio, Aratana Therapeutics, Next Vet, and VetDC.
 
Since
we are an early-stage company with limited operations and financing, virtually all our competitors have substantially more financial,
technical and personnel resources than us. Most of them also have established brands and substantial experience in the development, production,
regulation, and commercialization of animal health care products. Regarding our development of any new products or technology, we also
compete with academic institutions, governmental agencies and private organizations that conduct research in the field of animal health
medicines. We expect that competition in our industry is based on several factors including primarily product reliability and effectiveness,
product pricing, product branding, adequate patent and other IP protection, safety of use, and product availability.
 
Although
for the foreseeable future, our efforts and financial resources will continue to focus on successfully commercializing Spryng™,
our future business strategy plan includes the identification of additional animal care products we may license, acquire, or develop,
and then commercializing such products into a branded product portfolio along with Spryng™. Even if we successfully license, acquire
or develop such animal care products from our proprietary technology, or acquire any such new products, we may still fail to commercialize
them successfully for various reasons, including competitors offering alternative products which are more effective than ours, our discovery
of third-party IP rights already covering the products, harmful side effects caused to animals by the products, inability to produce
products in commercial quantities at an acceptable cost, or the products not being accepted by veterinarians and pet owners as being
safe or effective. If we fail to successfully obtain and commercialize future new animal care products, our business and prospects may
be harmed substantially.
 

15
 

 
We
will rely on third parties to conduct studies of our current and new products, and if these third parties do not successfully perform
their contracted commitments effectively or substantially fail to meet expected study deadlines, we could be delayed from effectively
commercializing our future products.
 
We
have entered into a clinical trial services agreement with Colorado State University and Ethos Veterinary Health. In the future, we may
engage other educational institutions with a veterinary medical curriculum to conduct studies of Spryng™ and other products to
be introduced by us. We expect to have limited control over the timing and resources that such third parties will devote to the studies.
Although we must rely on third parties to conduct our studies, we remain responsible for ensuring any of our studies are conducted in
compliance with protocols, regulations, and standards set by industry regulatory authorities and commonly referred to as current good
clinical practices (“cGCPs”) and good laboratory practices (“GLPs”). These required clinical and laboratory practices
include many items regarding the conducting, monitoring, recording, and reporting the results of target animal studies to ensure that
the data and results of these studies are objective and scientifically credible and accurate.
 
Our
success is highly dependent on the clinical advancement of our products and adverse results in clinical trials and other studies could
prevent us from effectively commercializing our future products
 
There
can be no assurance that clinical trials or studies of Spryng™ and our other products will demonstrate the safety and efficacy
of such products in a statistically significant manner. Failure to show efficacy or adverse results in clinical trials or studies could
significantly harm our business. While some clinical trials and studies of our product candidates may show indications of safety and
efficacy, there can be no assurance that these results will be confirmed in subsequent clinical trials or studies or provide a sufficient
basis for regulatory approval, if required. In addition, side effects observed in clinical trials or studies, or other side effects that
appear in later clinical trials or studies, may adversely affect our or our distributors’ ability to market and commercialize our
products.
 
Our
operations rely on third parties to produce our raw materials to produce our products.
 
We
rely on independent third parties to produce the raw materials (e.g. collagen, elastin, and heparin) that we use to produce our Spryng™
products. As such, we are dependent upon their services and will not be in a position to control their operations as we might if we directly
produced these raw materials. While we believe the raw materials used to manufacture Spryng™ products are readily available and
can be obtained from multiple reliable sources on a timely basis, circumstances outside our control may impair our ability to have an
adequate supply of raw materials to produce our Spryng™ products.
 
If
we experience the rapid commercial growth of Spryng™, we may not be able to manage such growth effectively.
 
We
contemplate rapid growth for our business as we bring our Spryng™ product to new customers and anticipate that this will place
significant demands on our management and our operational and financial resources. Our organizational structure will become more complex
as we add additional personnel, and we would likely require more financial and staff resources to support and continue our growth. If
we are unable to manage our growth effectively, our business, financial condition, and results of operations may be materially harmed.
 
Our
Distribution Agreements with MWI and Covetrus are important to our business and if we were to lose our Distribution Agreement it would
adversely affect our revenues and profitability.
 
We
entered into a Distribution Agreement with MWI in June 2022. Our Distribution Agreement with MWI is important to our business. We generated
65% of our total revenues from Spryng™ products sold under the Distribution Agreement in the fiscal year ended March 31, 2024.
If we were to lose our Distribution Agreement with MWI, it would have an adverse effect on our revenues and net income.
 
We
entered into a Distribution Agreement with Covetrus in December 2023. Our Distribution Agreement with Covetrus is also important to
our business. We generated 11% of our total revenues from Spryng™ products sold under the Distribution Agreement in the fiscal
year ended March 31, 2024. If we were to lose our Distribution Agreement with Covetrus, it would have an adverse effect on our revenues and net
income.
 

16
 

 
If
our current sales and marketing program is insufficient or inadequate to support the current introduction of our Spryng™ product,
we may not be able to sell this product in quantities to become commercially successful.
 
We
commenced sales of Spryng™ in the second quarter of fiscal 2022 and plan to increase our commercialization efforts for Spryng™
in the United States through our direct sales to veterinarians and our distributorship relationships with MWI and Covetrus. There are
significant risks involved in our building and managing an effective sales and marketing program, including our ability to manage and
support our distribution relationship with MWI and Covetrus, our ability to hire, adequately train, maintain, and motivate qualified
sales representatives for direct sales and to support our sales to MWI and Covetrus, to generate sufficient sales leads and other contacts,
and establish effective product distribution channels. Any failure or substantial delay in the development of our internal sales and
marketing program and distribution capabilities would adversely impact our business and financial condition.
 
Our
business will depend significantly on the sufficiency and effectiveness of our marketing and product promotional programs and incentives.
 
Due
to the highly competitive nature of our industry, we must effectively and efficiently promote and market our products through the Internet,
television and print advertising, social media, and through trade promotions and other incentives to sustain and improve our competitive
position in our market. Moreover, from time to time we may have to change our marketing strategies and spending allocations based on
responses from our veterinarian customers and pet owners. If our marketing, advertising, and trade promotions are not successful to create
and sustain consistent revenue growth or fail to respond to marketing strategy changes in our industry, our business, financial condition,
and results of operations may be adversely affected.
 
Any
damage to our reputation or our brand may materially harm our business.
 
Developing,
maintaining, and expanding our reputation and brand with veterinarians, pet owners, and others will be critical to our success. Our brand
may suffer if our marketing plans or product initiatives are unsuccessful. The importance of our brand and demand for our products may
decrease if competitors offer products with benefits similar to or as effective as our products and at lower costs to consumers. Although
we maintain procedures to ensure the quality, safety and integrity of our products and their production processes, we may be unable to
detect or prevent product and/or ingredient quality issues such as contamination or deviations from our established procedures. If any
of our products cause injury to animals, we may incur material expenses for product recalls, and may be subject to product liability
claims, which could damage our reputation and brand substantially.
 
If
we fail to attract and retain qualified management and key scientific personnel, we may be unable to successfully commercialize our current
products or develop new products effectively.
 
Our
success will significantly be dependent upon our current management and key scientific technicians, and also on our ability to attract,
retain and motivate future management and employees. We are highly dependent upon our current management and technology personnel, and
the loss of the services of any of them could delay or prevent the successful commercialization or development of current or future products.
Competition to obtain qualified personnel in the animal health field is intense due to the limited number of individuals possessing the
skills and experience required by our industry. We may not be able to attract or retain qualified personnel as needed on acceptable terms,
or at all, which would harm our business and operations.
 
Natural
disasters and other events beyond our control could materially adversely affect us.
 
Natural
disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy,
and thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power
shortages, pandemics (including the ongoing Coronavirus (COVID-19) epidemic) and other events beyond our control. Although we maintain
crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our
customers, and could decrease demand for our services.
 

17
 

 
Risks
relating to Manufacturing
 
We
may not be able to manage our manufacturing and supply chain effectively, which would harm our results of operations.
 
We
must accurately forecast demand for sales of Spryng™
in order to have adequate product inventory available
to fill customer orders timely. Our forecasts will be based on multiple assumptions that may cause our estimates to be inaccurate, and
thus affect our ability to ensure adequate manufacturing capability to satisfy product demand. Any material delay in our ability to obtain
timely product inventories from our manufacturing facility and our ingredient suppliers could prevent us from satisfying increased consumer
demand for our products, resulting in material harm to our brand and business. In addition, we will need to continuously monitor our
inventory and product mix against forecasted demand to avoid having inadequate product inventory or having too much product inventory
on hand. If we are unable to manage our supply chain effectively, our operating costs may increase materially.
 
Risks
relating to our Intellectual Property
 
Failure
to protect our intellectual property could harm our competitive position or cause us to incur significant expenses and personnel resources
to enforce our rights.
 
Our
success will depend significantly upon our ability to protect our intellectual property (“IP”) rights, including
patents, trademarks, trade secrets, and process know-how, which valuable assets support our brand and the perception of
Spryng™ and other products that we may commercialize in the future. We rely on patents, trademark, trade secret, and other intellectual property laws, as well as
non-disclosure and confidentiality agreements to protect our intellectual property. Our non-disclosure and confidentiality
agreements may not always effectively prevent disclosure of our proprietary IP rights and may not provide an adequate remedy in the
event of an unauthorized disclosure of such information, which could harm our competitive position. We also may need to engage in
costly litigation to enforce or protect our patent or other proprietary IP rights, or to determine the validity and scope of
proprietary rights of others. Any such litigation could require us to expend significant financial resources and also divert the
efforts and attention of our management and other personnel from our ongoing business operations. If we fail to protect our
intellectual property, our business, brand, financial condition, and results of operations may be materially harmed.
 
We
may be subject to intellectual property infringement claims, which could result in substantial damages and diversion of the efforts and
attention of our management.
 
We
must respect prevailing third-party intellectual property, and the procedures and steps we take to prevent our misappropriation, infringement,
or other violation of the intellectual property of others may not be successful. If third parties assert infringement claims against
us, our suppliers, or veterinarians using our products and technology, we could be required to expend substantial financial and personnel
resources to respond to and litigate or settle any such third-party claims. Although we believe our patents, manufacturing processes
and products do not infringe in any material respect on the intellectual property rights of other parties, we could be found to infringe
on such proprietary rights of others. Any claims that our products, processes, or technology infringe on third-party rights, regardless
of their merit or resolution could be very costly to us and also materially divert the efforts and attention of our management and technical
personnel. Any adverse outcome to us from one or more such claims against us could, among other things, require us to pay substantial
damages, to cease the sale of our products, to discontinue our use of any infringing processes or technology, to expend substantial resources
to develop non-infringing products or technology, or to license technology from the infringed party. If one or more of such adverse outcomes
occur, our ability to compete could be affected significantly and our business, financial condition and results of operations could be
harmed substantially.
 

18
 

 
Risks
related to Regulation
 
We
may be unable to obtain required regulatory approvals for future products timely or at all, and the denial or substantial delay of any
such approval could delay materially or even prevent our efforts to commercialize new products, which could adversely impact our ability
to generate future revenues.
 
Based
on our determination that our Spryng™ products is a device for the treatment of animals rather than being a pharmaceutical product,
we believe we are not required to obtain regulatory approval to produce and market them for their current intended uses. However, we
have not received confirmation from any regulatory authority that our determination is correct. The production, marketing, and sale of
any future products for the treatment of animals based on our proprietary technology may require us to obtain regulatory approval from
the Center for Veterinarian Medicine (“CVM”), a branch of the FDA, and/or the USDA, and also certain state regulatory authorities.
Any substantial delay or inability to obtain required regulatory approvals for any new products developed by us could substantially delay
or even prevent their commercialization, which would materially adversely impact our business and prospects.
 
Moreover,
at such future time that we commence business internationally, our products will need to obtain regulatory approval for labeling, marketing,
and sale in foreign countries from authorities such as the European Commission (“EU”) or the European Medicine Agency (“EMA”).
Any substantial delay or inability to obtain any necessary foreign regulatory approvals for our products could harm our business and
prospects materially.
 
Risks
relating to our Information Technology
 
A
failure of one or more key information technology systems, networks, or processes may harm our ability to conduct our business effectively.
 
The
effective operation of our business and operations will depend significantly on our information technology and computer systems. We will
rely on these systems to effectively manage our sales and marketing, accounting and financial, and legal and compliance functions, new
product development efforts, research and development data, communications, supply chain and product distribution, order entry and fulfillment,
and other business processes. Any material failure of our information technology systems to perform satisfactorily, or their damage or
interruption from circumstances beyond our control such as power outages or natural disasters, could disrupt our business materially
and result in transaction errors, processing inefficiencies, and even the loss of sales and customers., causing our business and results
of operations to suffer materially.
 
Risks
Related to our Company
 
Ownership
and control of our Company is concentrated in our management.
 
As
of June 1, 2024, our officers and directors beneficially own or control approximately 13.42% of our outstanding shares of common stock.
This concentrated ownership and control by our management could adversely affect the status and perception of our common stock and/or
warrants. In addition, any material sales of common stock of our management, or even the perception that such sales will occur, could
cause a material decline in the trading price of our common stock and/or warrants.
 
Due
to this ownership concentration, our management has the ability to control all matters requiring stockholder approval including the election
of all directors, the approval of mergers or acquisitions, and other significant corporate transactions. Any person acquiring our common
stock most likely will have no effective voice in the management of our company. This ownership concentration also could delay or prevent
a change of control of the Company, which could deprive our stockholders from receiving a premium for their common shares.
 
The
market price of our common stock is highly volatile because of several factors, including a limited public float.
 
The
market price of our common stock has been volatile in the past and the market price of our common stock and our warrants is likely to
be highly volatile in the future. You may not be able to resell shares of our common stock following periods of volatility because of
the market’s adverse reaction to volatility.
 
Other
factors that could cause such volatility may include, among other things:
 


 
●
actual
    or anticipated fluctuations in our operating results;

 
●
the
    absence of securities analysts covering us and distributing research and recommendations about us;

 
●
we
    may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held;

 
●
overall
    stock market fluctuations;

 

19
 

 


 
●
announcements
    concerning our business or those of our competitors;

 
●
actual
    or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms;

 
●
conditions
    or trends in the industry;

 
●
litigation;

 
●
changes
    in market valuations of other similar companies;

 
●
future
    sales of common stock;

 
●
departure
    of key personnel or failure to hire key personnel; and

 
●
general
    market conditions.

 
Any
of these factors could have a significant and adverse impact on the market price of our common stock. In addition, the stock market in
general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating
performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock and/or
warrants, regardless of our actual operating performance.
 
Our
common stock has in the past been a “penny stock” under SEC rules, and if our common stock is deemed to be a “penny
stock,” it will be more difficult to resell our securities.
 
In
the past, our common stock was a “penny stock” under applicable Securities and Exchange Commission (“SEC”) rules
(generally defined as non-exchange traded stock with a per-share price below $5.00). While our common stock is currently not considered
a “penny stock,” if we do not continue to satisfy the requirements to be exempt from the “penny stock” rules,
it will be more difficult to resell our securities. “Penny stock” rules impose additional sales practice requirements on
broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers”
or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments
in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized
risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also
must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and
its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s
account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s
written agreement to the transaction.
 
Legal
remedies available to an investor in “penny stocks” may include the following:
 


 
●
If
    a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or state securities
    laws, the investor may be able to cancel the purchase and receive a refund of the investment.

 
●
If
    a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms
    that committed the fraud for damages.

 
These
requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes
subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers
from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements
may restrict the ability of broker-dealers to sell our common stock or our warrants and may affect your ability to resell our common
stock and our warrants.
 
Many
brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest
in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial
risk generally associated with these investments. For these reasons, penny stocks may have a limited market and, consequently, limited
liquidity. We can give no assurance that our common stock will not be classified as a “penny stock” in the future.
 

20
 

 
We
are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley
Act”) and if we fail to continue to comply, our business could be harmed, and the price of our securities could decline.
 
Rules
adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act require an annual assessment of internal controls over financial
reporting, and for certain issuers, an attestation of this assessment by the issuer’s independent registered public accounting
firm. The standards that must be met for management to assess the internal controls over financial reporting as effective are evolving
and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards. We expect to incur
significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long
it will take or costly it will be to complete the assessment of the effectiveness of our internal controls over financial reporting for
each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete
the assessment and remediation process on a timely basis. In the event that our Chief Executive Officer or Chief Financial Officer determines
that our internal controls over financial reporting are not effective as defined under Section 404, we cannot predict how regulators
will react or how the market prices of our securities will be affected; however, we believe that there is a risk that investor confidence
and the market value of our securities may be negatively affected.
 
We
do not anticipate paying any dividends on our common stock for the foreseeable future.
 
We
have not paid any dividends on our common stock to date, and we do not anticipate paying any such dividends in the foreseeable future.
We anticipate that any earnings experienced by us will be retained to finance the implementation of our operational business plan and
expected future growth.
 
The
elimination of monetary liability against our directors and executive officers under Nevada law and the existence of indemnification
rights held by them granted by our bylaws could result in substantial expenditures by us.
 
Our
Articles of Incorporation eliminate the personal liability of our directors and officers to the Company and its stockholders for damages
for breach of fiduciary duty to the maximum extent permissible under Nevada law. In addition, our Bylaws provide that we are obligated
to indemnify our directors or officers to the fullest extent authorized by Nevada law for costs or damages incurred by them involving
legal proceedings brought against them relating to their positions with the Company. These indemnification obligations could result in
our incurring substantial expenditures to cover the cost of settlement or damage awards against our directors or officers.
 
Our
Articles of Incorporation, Bylaws, and Nevada law may have anti-takeover effects that could discourage, delay or prevent a change in
control, which may cause our stock price to decline.
 
Our
Articles of Incorporation, Bylaws, and Nevada law could make it more difficult for a third party to acquire us, even if closing such
a transaction would be beneficial to our stockholders. We are authorized to issue up to 20,000,000 shares of preferred stock. This preferred
stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without
further action by stockholders. The terms of any series of preferred stock may include voting rights (including the right to vote as
a series on particular matters), preferences as to dividend, liquidation, conversion and redemption rights, and sinking fund provisions.
None of our preferred stock will be outstanding at the closing of this offering. The issuance of any preferred stock could materially
adversely affect the rights of the holders of our common stock, and therefore, reduce the value of our common stock. In particular, specific
rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third
party and thereby preserve control by the present management.
 
Provisions
of our Articles of Incorporation, Bylaws, and Nevada law also could have the effect of discouraging potential acquisition proposals or
making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions
may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, our certificate of incorporation
and by-laws and Delaware law, as applicable, among other things:
 


 
●
provide
    the board of directors with the ability to alter the by-laws without stockholder approval;

 
●
establishing
    advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon
    at stockholder meetings; and

 
●
provide
    that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum.

 

21
 

 
ITEM
1B. UNRESOLVED STAFF COMMENTS
 
None.
 
Item
1C. Cybersecurity
 
Risk
Management and Strategy
 
We
have established policies and processes for assessing, identifying, and managing risks from cybersecurity threats, and have integrated
these processes into our overall risk management systems and processes. We routinely assess risks from cybersecurity threats, including
any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality,
integrity, or availability of our information systems or any information residing therein.
 
We
conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our
business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments include
identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such
risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
 
Following
these risk assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to minimize identified
risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. We devote
significant resources and designate high-level personnel, including our CFO, who reports to our Board, to manage the risk assessment
and mitigation process.
 
As
part of our overall risk management system, we monitor our safeguards and train our employees on these safeguards. Personnel at all levels
and departments are made aware of our cybersecurity policies through trainings integrated into new employee onboarding processes and
annual employee re-training.
 
We
engage consultants, experts, or other third parties in connection with our risk assessment processes. These third parties assist us in
designing and implementing our cybersecurity policies and procedures, as well as in monitoring and testing our safeguards.
 
We
require each third-party service provider who may have access to our systems and/or our sensitive data to confirm that it has the ability
to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security
measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect
our company.
 
We
have not experienced any cybersecurity incidents that have been determined to be material in the past, however, like other medical device
companies, we have experienced cybersecurity incidents and may continue to experience them in the future. For additional information
regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, materially affected
or are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition,
please refer to “Item 1A. Risk Factors” in this Annual Report on Form 10-K.
 
Governance
 
One
of the key functions of our Board is informed oversight of our risk management process, including risks from cybersecurity threats. Our
Board is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day
management of the material risks we face. Our Board administers its cybersecurity risk oversight function directly as a whole, as well
as through the Audit Committee.
 
Our
CFO and representatives from our management committee on cybersecurity, which includes our Chief Business Development Officer and General
Counsel, and our outside consultants, who collectively possess significant experience in evaluating, managing, and mitigating security
and other risks, including cybersecurity risks, are primarily responsible to assess and manage our material risks from cybersecurity
threats.
 

22
 

 
Our
CFO and management committee on cybersecurity oversee our cybersecurity policies and processes, including those described in “Risk
Management and Strategy” above. The processes by which our CFO and representatives from our management committee on cybersecurity
are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents includes the following:
 


 
●
monitoring
    of Company computer and information systems for potential malware, ransomware and other malicious activity, and remediation of identified
    issues, including mitigation of identified risks and containment and elimination of any malicious software;

 
 
 

 
●
mandatory
    cybersecurity training as part of new employee onboarding along with required annual and periodic employee cybersecurity re-training;

 
 
 

 
●
monitoring
    of systems and network infrastructure by security information and event management application;

 
 
 

 
●
prompt
    incident reporting directly to the Board; and

 
 
 

 
●
escalation
    to the Company’s Audit Committee and Board as warranted based upon the nature of the identified issue.

 
Our
CFO and/or representatives from our management committee on cybersecurity provide periodic briefings to the Audit Committee and the Board
regarding our Company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses,
cybersecurity systems testing, activities of third parties, and the like.
 

23
 

 
ITEM
2. PROPERTIES
 
We
do not own any real estate. We lease approximately 3,600 square feet of office, laboratory, and warehouse space at 5251 Edina Industrial
Blvd., Edina, Minnesota. This lease will expire in November 2026.
 
In
January 2022, we leased an additional 2,400 square feet of office space near the location above. This lease will expire in March 2027.
Refer to Note 9. Commitments and Contingencies, in the Notes to Consolidated Financial Statements set forth in Part II, Item 8.
Financial Statements and Supplementary Data of this Annual Report, for further information regarding our leases.
 
On
January 10, 2023, the Company entered into a new lease agreement for 14,073 square feet of production and warehouse space with a commencement
date of April 1, 2023, which is when the control and right of use for this lease asset took place. The initial monthly base rent is $8,420
and has annual increases of 2.5%. The Company is also responsible for its proportional share of common space expenses, property taxes,
and building insurance. The lease will terminate on June 30, 2033, and the Company has a renewal option for a period of five years.
 
The
Company believes that the current facilities are suitable and adequate to meet the Company’s current needs and that suitable additional
space will be available as and when needed on acceptable terms.
 
ITEM
3. LEGAL PROCEEDINGS
 
From
time to time, we may become involved in legal proceedings arising in the ordinary course of our business, the resolution of which we
do not anticipate would have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results
of operations. Refer to Note 10. Commitments and Contingencies – Legal Proceedings, in the Notes to Consolidated Financial
Statements set forth in Part II, Item 8. Financial Statements and Supplementary Data of this Annual Report, for further information regarding
potential legal proceedings.
 
ITEM
4. MINE SAFETY DISCLOSURES
 
Not
applicable.
 
PART
II
 
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
 
Market
Information
 
The
Company’s common stock was publicly traded on the Nasdaq Capital Market under the symbol “PETV” during fiscal 2024.
 
Number
of Stockholders
 
As
of March 31, 2024, there were approximately 320 stockholders of record. The number of stockholders of record does not include certain
beneficial owners of our common stock, whose shares are held in the names of various dealers, clearing agencies, banks, brokers, and
other fiduciaries.
 
Dividends
 
We
have never declared or paid any cash dividends on our common stock and anticipate that for the foreseeable future all earnings will be
retained for use rather than paid out as cash dividends
 

24
 

 
Unregistered
Sales of Securities
 
From
January 2024 to March 2024, the Company issued 324,000 shares of common stock to four consultants for services provided to the Company
valued at $333,660.
 
From
January 2024 to March 2024, the Company issued 109,834 shares of common stock upon the vesting of restricted stock units granted to four
employees, with 15,250 shares vesting on January 2, 2024, 1,250 shares vesting on March 12, 2024, and 93,334 shares vesting on March
28, 2024.
 
From
January 2024 to March 2024, the Company sold 1,386,469 units to thirteen investors, with each unit consisting of one share of restricted
common stock and one warrant to purchase one share of common stock, at a price of $0.90 per unit. In total the Company raised $1,247,819
pursuant to the private offering of the units. The warrants are immediately exercisable, have an exercise price of $1.50 per share (and
no cashless exercise rights), and are exercisable until February 1, 2027.
 
From
January 2024 to March 2024, the Company issued 164,340 shares upon the conversion of debt to one shareholder in the amount of $123,255
including accrued interest of $3,255. The effective conversion price was $1.60 per share.
 
All
of these transactions described above were exempt from registration in reliance on Section 4(a)(2) of the Securities Act of 1933, as
amended, as a transaction by an issuer not involving a public offering. The purchasers of securities in each of these transactions represented
their intention to acquire securities for investment only and not with a view to offer or sell, in connection with any distribution of
the securities, and appropriate legends were affixed to the share certificates and instruments issued in such transactions.
 
Purchases
of Equity Securities by the Registrant and Affiliated Purchasers
 
None.
 
Securities
Authorized for Issuance
 
The
following table sets forth securities authorized for issuance under any equity compensation plan approved by our stockholders as well
as any equity compensation plans not approved by our stockholders as of March 31, 2024.
 


Equity Compensation Plan Information

 

Plan category 
Number of securities to be issued upon exercise of outstanding options, warrants, and rights  
Weighted average exercise price of outstanding options, warrants, and rights  
Number of Securities remaining available for future issuance under equity compensation plans (excluding securities reflect in table) 

Plans approved by shareholders(1) 
 1,140,933  
$2.58  
 822,605 

Plans not approved by shareholders(2) 
 562,817  
$2.00  
 — 

 


(1)
PetVivo
    Holdings, Inc. Amended and Restated 2020 Equity Incentive Plan.

 
 

(2)
Represents
    warrants granted to officers, directors, employees, financial advisors, consultants, investors, and other service providers pursuant
    to individual contracts, investments, awards, or arrangements for compensatory purposes.

 

25
 

 
Purchases
of Equity Securities by the Registrant and Affiliated Purchasers
 
None.
 
ITEM
6. RESERVED
 
Not
applicable.
 
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
Critical
Accounting Policies and Estimates
 
Our
Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”),
which require us to make estimates and assumptions that may affect the reported financial condition and results of operations should
actual results differ from these estimates and assumptions. We base our estimates and assumptions on the best available information and
believe them to be reasonable for the circumstances. We believe that of our significant accounting policies, the following involve a
higher degree of judgment and complexity. Refer to Note 1 to the Consolidated Financial Statements for a complete discussion of
our significant accounting policies. Management has reviewed these critical accounting policies and estimates with the Audit Committee
of our Board of Directors.
 
Revenue
Recognition. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Codification
(“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The Company recognizes
revenue in accordance with ASC 606 using the modified retrospective method applied to all contracts. Revenue is recorded for syringes
shipped to our distributors and veterinarian customers.
 
Asset
Impairment. In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”),
we evaluate the value of leasehold improvements and operating lease right-of-use assets that have been open for a period sufficient
to reach maturity. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that
the assets might be impaired and the projected undiscounted cash flows estimated to be generated by those assets are less than
the carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment
loss is recorded separately as a component of operating income.
 
Our
impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair
values. Significant assumptions used in our projected undiscounted cash flows analyses include revenue growth rates and expense reductions.
Additionally, significant assumptions utilized in our fair value analyses include the assumptions, as well as market participant real
estate assumptions and discount rate. We do not believe there is a reasonable likelihood that there will be a material change in the
estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our
estimates and assumptions, our operating results could be adversely affected.
 
Share-Based
Payments. We account for share-based payments in accordance with ASC 718, Compensation – Stock Compensation (“ASC
718”). To determine the fair value of our stock option awards, we use the binomial option-pricing model, which requires management
to apply judgment and make assumptions to determine the fair value of our awards. These assumptions include estimating the length of
time employees will retain their vested stock options before exercising them (the “expected term”) and the estimated volatility
of the price of our common stock over the expected term.
 
We
calculate a weighted-average expected term based on historical experience. Expected stock price volatility is based on historical volatility
of our common stock. Changes in these assumptions can materially affect the estimate of the fair value of our share-based payments and
the related amount recognized in our Consolidated Financial Statements.
 
Income
Taxes. We calculate income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which
requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on
the difference between the Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective
tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain
judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to
reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or
all of the deferred taxes may not be realized. Changes in our level and composition of earnings, tax laws or the deferred tax
valuation allowance, as well as the results of tax audits, may materially impact the effective income tax rate.
 
We
evaluate our income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting,
and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether
to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if
it is more likely than not that the position is sustainable based on its technical merits.
 


26
 

 
The
calculation of the deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position
and to establish a valuation allowance require management to make estimates and assumptions. We believe that our assumptions and estimates
are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities,
valuation allowances or net income.
 
Overview
 
The
following discussion of our financial condition and results of operations should be read in conjunction with our financial statements
and related notes that appear elsewhere in this Annual Report. In addition to historical consolidated financial information, the following
discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially
from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed
below and elsewhere in this prospectus, particularly in “RISK FACTORS.” We caution the reader not to place undue reliance
on these forward-looking statements, which reflect management’s analysis only as of the date of this prospectus.
 
We
are a smaller reporting company and have incurred substantial losses in connection
with our limited operations. We need substantial capital to pursue our commercialization plans of our lead product Spryng™, to finance our clinical trials and to fund working capital
and general corporate purposes. 
 
The
independent auditor’s report accompanying our March 31, 2024, consolidated financial statements contains an explanatory
paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared
“assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our
liabilities and commitments in the ordinary course of business. We have suffered recurring losses from operations, and our working
capital is insufficient to fund our operations for the next 12 months. These factors raise substantial doubt about our ability to
continue as a going concern.
 
RESULTS
OF OPERATION
 


  
For Fiscal Year Ended March 31, 

  
2024  
2023 

Revenues 
$968,706  
$917,162 

Total Cost of Sales 
 229,180  
 221,036 

Total Operating Expenses 
 11,360,866  
 9,429,578 

Total Other Income (Expense) 
 (333,955) 
 15,844 

Net Loss 
 (10,955,295) 
 (8,717,608)

Net loss per share - basic and diluted 
$(.78) 
$(.85)

 
For
The Fiscal Year Ended March 31, 2024 (“fiscal 2024”) Compared to The Year Ended March 31, 2023 (“fiscal 2023”)
 
Total
Revenues. Revenues were $968,706 in fiscal 2024 compared to $917,162 for fiscal 2023. Revenues in fiscal 2024 consisted of sales
of our Spryng™ product to our Distributors of $731,813 and to veterinary clinics in the amount of $236,893. In the twelve months
ended March 31, 2023, our revenues of $917,162 consisted of sales of our Spryng™ product to our Distributor of $636,345 and to
veterinary clinics in the amount of $280,817. The increase in our revenues in the twelve months ended March 31, 2024, is due to sales
to our Distributors pursuant to our Distribution Agreements.
 
Total
Cost of Sales. Cost of sales was $229,180 in fiscal 2024 compared to $221,036 for fiscal 2023. Cost of sales includes product
costs related to the sale of our Spryng™ products, labor and certain overhead costs, including the use of certain manufacturing equipment costs. The Company has historically prepared a manufacturing
allocation on a quarterly basis based on certain manufacturing expenses as part of cost of sales.
 
Operating
Expenses. Operating expenses increased to $11,360,866 in fiscal 2024 compared to $9,429,578 in fiscal 2023. Operating expenses
consisted of general and administrative, sales and marketing, and research and development expenses. The increase is primarily due to
increased G&A expenses and sales and marketing expenses related to the sale of our Spryng™ product.
 
General
and administrative (“G&A”) expenses were $6,693,186 and $5,022,943 in fiscal 2024 and 2023, respectively. General and
administrative expenses include compensation and benefits, contracted services, consulting fees, stock compensation, and incremental
public company costs.
 
Sales
and marketing expenses were $3,399,666 and $3,410,277 in fiscal 2024 and 2023, respectively. Sales and marketing expenses include compensation,
consulting, tradeshows, and stock compensation costs to support the launch of our Spryng™ product.
 
Research
and development (“R&D”) expenses were $1,268,014 and $996,358 in fiscal 2024 and 2023, respectively. The increase was
related to clinical studies and efforts to support the launch of Spryng™.
 
Operating
Loss. As a result of the foregoing, our operating loss was $10,621,340 and $8,733,452 in fiscal 2024 and 2023, respectively.
The increase was related to the costs to support the launch of Spryng™ and the incremental public company costs.
 
Other
(Expense) Income. Other income was ($333,955) in fiscal 2024 as compared to $15,844 in fiscal 2023. Other income in fiscal
2024 consisted of loss on extinguishment of debt of ($534,366), settlement payment of ($180,000) to David Masters offset by the
extinguishment of payables of $385,874, and interest expense of ($6,463). Other income in fiscal 2023 consisted of net interest
income of $15,844.
 

27
 

 
Net
Loss. Our net loss in fiscal 2024 was $10,955,295 or ($0.78) as compared to a net loss of $8,717,608 or ($0.85) per share in
fiscal 2023. The weighted average number of shares outstanding was 13,969,754 compared to 10,222,994 for fiscal 2024 and 2023, respectively.
 
LIQUIDITY
AND CAPITAL RESOURCES
 
On
August 13, 2021, we closed an underwriting public offering of 2,500,000 units, at a price of $4.50 per unit. Net proceeds from the Public
Offering were approximately $9,781,000, net of commissions and expenses of the offering. As of March 31, 2024, our current assets were
$1,041,660 including $87,403 in cash and cash equivalents. In comparison, our current liabilities as of that date were $1,412,370 including
$1,064,260 of accounts payable and accrued expenses. Our working capital deficit as of March 31, 2024 was $370,710.
 
The
Company has continued to realize losses from operations. However, because of our recent offerings, we believe we will have sufficient
cash to meet our anticipated operating costs and capital expenditure requirements through [list end date]. We will need to
raise additional capital in the future to support our efforts to commercialize Spryng™ and our ongoing operations. We expect to
continue to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund our business
expansion. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance
and market conditions. There can be no guarantee that the Company will be successful in its ability to raise additional capital to fund
its business plan.
 
Net
Cash Used in Operating Activities – We used $7,419,588 of net cash in operating activities in fiscal 2024. This cash used
in operating activities was primarily attributable to our net loss of $10,955,295, an extinguishment of payables of $385,874, and an
increase in inventory of $19,793, partially offset by stock compensation expense of $2,109,783, investor relations services paid in stock
of $452,432, a decrease in accounts receivable of $68,020, a decrease in prepaid expenses and other assets of $41,870, and an increase
in accounts payable and accrued expenses of $81,538.
 
Net
Cash Used in Investing Activities – We used $309,104 of net cash in investing activities in fiscal 2024 consisting entirely
on the purchase of equipment.
 
Net
Cash Provided by Financing Activities – During fiscal 2024, we were provided with net cash of $7,340,781 from
financing activities consisting primarily of $6,527,439 in stock and warrant sales and $670,000 from issuance of convertible
debentures, $150,000 issuance of notes payable, which were offset by $6,658 in repayments of note payable.
 
Inventory
 
Inventories
are stated at cost, subject to the lower of cost or net realizable value. Cost includes materials, labor, and manufacturing overhead
related to the purchase and production of inventories. Net realizable value is the estimated selling price less estimated costs of completion,
disposal, and transportation. We regularly review inventory quantities on hand through an inventory count.
 
At
March 31, 2024, the Company’s inventory has a carrying value of $390,076 and is broken down into $35,442 of finished goods, $20,289
of work in process and $334,345 in raw material.
 
At
March 31, 2023, the Company’s inventory has a carrying value of $370,283 and is broken down into $13,159 of finished goods, $53,398
of work in process and $303,726 in raw material.
 
MATERIAL
COMMITMENTS
 
Note
Payable and Accrued Interest
 
As
of March 31, 2024, we are obligated on notes and accrued interest of $13,171.
 

28
 

 
OFF-BALANCE
SHEET ARRANGEMENTS
 
As
of March 31, 2024, and as of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are material to investors.
 
GOING
CONCERN
 
The
independent auditors’ report accompanying our March 31, 2024 Form 10-K and consolidated financial statements contains an
explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have
been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our
liabilities and commitments in the ordinary course of business. In August 2021, we raised approximately $9,781,000 from the sale of
units in a Public Offering. Our working capital deficit at March 31, 2024 was $370,710.
 
CRITICAL
ACCOUNTING POLICIES
 
We
prepare our consolidated financial statements in accordance with generally accepted accounting standards in the United States of
America. Our significant accounting policies are described in Note 1 to our consolidated financial statements attached hereto. We
believe the critical accounting policies (Note 1 and Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation) involve the most significant judgments and estimates used in the
preparation of the consolidated financial statements.
 
RECENTLY
ISSUED ACCOUNTING STANDARDS
 
The
Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effectiveness dates during the
periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted
accounting principles and do not believe that any new or modified principles will have a material impact on the Company’s reported
financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company’s
financial management.
 
In
August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging
- Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s
Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP.
Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded
conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative
scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income
per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim
periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of
the standard on the consolidated financial statements.
 
In
June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial
Instruments,” which replaces the existing “incurred loss” model for recognizing credit losses with an “expected
loss” model referred to as the CECL model. Under the CECL model, the Company is required to present certain financial assets carried
at amortized cost, such as accounts receivable, at the net amount expected to be collected. The measurement of expected credit losses
is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts
that affect the collectability of the reported amount. The Company adopted this standard in the consolidated financial statements for
the year ended March 31, 2024. The change had no impact on the Company’s financial statements.
 
All
other newly issued but not yet effective accounting pronouncements have been deemed either immaterial or not applicable.
 
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not
applicable.
 

29
 

 
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
The
financial statements for the years ended March 31, 2024 and 2023 are being filed with this report and commence on page F-1, immediately
following the signature page.
 
ITEM
9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
None.
 
ITEM
9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
 
We
maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or
submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in
the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal
executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their
evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive officer
and our principal financial officer concluded that our disclosure controls and procedures were effective.
 
Management’s
annual report on internal control over financial reporting
 
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934. Our internal control
over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles (GAAP) and includes those policies
and procedures that:
 


 
●
Pertain
    to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

 
●
Provide
    reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
    generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations
    of our management and our directors; and

 
●
Provide
    reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that
    could have a material effect on the financial statements.

 
Because
of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
Our
management assessed the effectiveness of our internal control over financial reporting as of March 31, 2024. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in
Internal Control — Integrated Framework (revised 2013). This assessment included an evaluation of the design and procedures of
our control over financial reporting.
 
Based
on our assessment, our management concluded that as of March 31, 2024, our internal control over financial reporting was effective.
 
As a smaller reporting company, the Company is not required to include in this Annual Report on Form 10-K a report
on the effectiveness of its internal control over financial reporting by the Company’s independent registered public accounting
firm
 

30
 

 
Changes
in internal control over financial reporting
 
In
fiscal 2022, we had certain internal controls over financial reporting that were not effective, which related to: (i) deficiencies in
segregation of duties, (ii) deficiencies in staffing or our financial accounting department, and (iii) limited checks and balances. We
took steps to remedy these matters in fiscal 2023 and the quarter ended March 31, 2023. We added a full-time controller in March 2022
to increase the size of our accounting staff to address the concern that we do not effectively segregate certain accounting duties and
have adequate staffing, which we believe resolved these material weaknesses in disclosure controls and procedures. By adding a full-time
controller, we were also able to address the material weakness relating to limited checks and balances in approving purchases, payroll,
disbursements, and other finance functions. In addition, we converted to a new accounting system and the Audit Committee increased its
oversight role of our financial reporting process, which included reviewing our audited and interim financial statements and earnings
releases on a quarterly basis.
 
ITEM
9B. OTHER INFORMATION
 
During
the fiscal quarter ended March 31, 2024, none of our directors or officers (as defined in Section 16 of the Securities Exchange Act of
1934, as amended) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was
intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as
defined in Item 408(a) of Regulation S-K.
 
ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENTS INSPECTIONS
 
Not
Applicable.
 

31
 

 
PART
III
 
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
The
following table sets forth the name, age, and position held with respect to our executive officers and directors as of June 28, 2024:
 


Name
    
 
Age
    
 
Positions
    and Offices With Registrant 

John
    Lai 
 
61
 
Chief
    Executive Officer, President, and Director 

Garry
    Lowenthal
 
64
 
Chief
    Financial Officer 

Randall
    Meyer 
 
60
 
Chief
    Operating Officer 

Spencer
    Breithaupt (2) (3)
 
63
 
Director

Joseph
    Jasper (1)(2)
 
59
 
Director

Robert
    Costantino (1)(3)
 
65
 
Director

Diane
    Levitan (2)
 
59
 
Director

James
    Martin (1)
 
85
 
Director
    and Chairman of the Board of Directors

Robert
    Rudelius (2)(3)
 
67
 
Director

 


(1)
Member
    of the Audit Committee.

(2)
Member
    of the Nominating and Governance Committee.

(3)
    
Member
    of the Compensation Committee.

 
Biographies
of Directors and Officers
 
John
Lai. Mr. Lai has served as a director and senior executive officer since March 2014, serving in various capacities that include
serving as our Chief Financial Officer from May 2018 through December 2018 and serving as our Chief Executive Officer from March 2014
to May 2017 and June 2019 to present. From March 2012 to April 2016, Mr. Lai also was Chief Executive Officer and a director of Blue
Earth Resources, Inc., a small public company that acquired and managed working interests in producing oil and gas leases in Louisiana.
Mr. Lai has over thirty years of senior executive and operational management and financial experience while holding key executive positions
with several public companies in various industries. In 1992, Mr. Lai founded, and until December 2012 was the principal owner and President
of Genesis Capital Group, Inc., which provided significant consulting services to many public and private companies in powersports, technology,
and other industries, while advising its clients in corporate development, mergers and acquisitions, and private and public capital-raising
through equity offerings. Mr. Lai’s role as a co-founder of our Company and his many years of experience as a chief executive officer
of many public or private companies are material factors regarding his qualifications to serve on our Board of Directors.
 
Garry
Lowenthal. Mr. Lowenthal has over 25 years of extensive experience in senior operations and key finance management positions,
both with private and public companies. He has developed a substantial background with equity capital raising transactions while managing
both private placements and public offerings for various corporations. Mr. Lowenthal has vast financial and corporate management experience,
including performing the functions as the Managing Partner of Security First International, Inc., a CFO advisory and management consulting
firm, assuming the role of an advisor, acting chief financial officer and director of Elate Group, Inc. (Elate Moving LLC), a global
moving and storage company based in New York City, through his CFO consulting company Security First International, Inc., and taking
on the responsibilities of a director, Executive Vice President and Chief Financial Officer of Fision Corporation (OTCQB: FSSN). Furthermore,
Mr. Lowenthal has served on the national board of Financial Executives International (FEI), a premier professional association for CFOs
and other senior financial executives. He has also served as President of the Twin Cities Chapter of FEI and, in the past, as chairman
of FEI’s national technology committee. Mr. Lowenthal has been on the Alumni Advisory Board of the Carlson School of Management
at the University of Minnesota where he graduated with a master’s degree in taxation and finance and a Bachelor’s of Science
in Business degree in Accounting and an Associates in Liberal Arts degree from the University of Minnesota. He has also served as a District
Chairman for the Boy Scouts of America and serves on the President’s Cabinet for the local Council. Mr. Lowenthal is also a past
President and Director for Kiwanis International in his local community club. As an operational CFO, along with his financial reporting
and regulatory expertise, Mr. Lowenthal further understands the world of corporate governance, through his experiences serving as a fiduciary
director. Finally, Mr. Lowenthal’s experiences working for two of the largest CPA/Consulting firms, PricewaterhouseCoopers (PwC)
and Deloitte, with various client engagements in diverse industries, allows him to bring a unique perspective as an advisor to Boards
of Directors of public companies.
 

32
 

 
Randall
Meyer. Mr. Meyer has served as our Chief Operating Officer since November 2021, and previously served in the same role from April
2015 to November 2017. He worked as an independent consultant for the Company between December 2017 and October 2021. From January 2009
to April 2015, Mr. Meyer served as Chief Operating Officer of Gel-Del Technologies, Inc., our wholly-owned subsidiary, while being in
charge of all operational and marketing activities of Gel-Del. He also served as a director of the Company from April 2015 through March
2022. Prior to joining Gel-Del, Mr. Meyer’s substantial medical device industry management experience included being Chief Operating
Officer of Softscope Medical Technologies, Inc. and being Chief Executive Officer of Tactile Systems Technology, Inc.
 
Spencer
Breithaupt. Mr. Breithaupt has over 30 years of management and leadership experience in the veterinary space, most recently with
MWI Animal Health, a subsidiary of Amerisource Bergen (“MWI”), from December 2009 through December 2022. He served in several
positions at MWI, including as the Vice President of Sales from December 2015 through May 2020 and the Vice President of Sales and Supply
Chain Solutions from May 2020 through December 2022. He oversaw account segmentation which allowed MWI to expand from being a regional
player to the largest US nationwide animal health distributor. Prior to joining MWI, he served as the Director of National Accounts at
Wyeth/Fort Dodge Animal Health from 2007–2009, where he developed a distributor strategy and implemented the first minimum advertised
pricing (“MAP”) model into the animal health industry. Mr. Breithaupt has also worked for Fortune 500 animal health companies,
including Bristol Myer, Johnson & Johnson and Wyeth, where he held various sales and marketing roles. Growing up in the veterinarian
industry as the son of a prominent veterinarian gave him great insight when launching his career into animal health. Mr. Breithaupt has
seen the transformation of the animal-human bond, and it continues to make him passionate about improving our pet’s lives. Mr.
Breithaupt extensive experience in the animal health distributor business is a material factor which demonstrates his qualifications
to serve on our Board of Directors. 
 
Robert
Costantino. Mr. Costantino has served as director of the Company since July 27, 2022. Mr. Costantino is a retired senior
executive with several decades of experience serving as Chief Executive Officer, Chief Operating Officer, Chief Financial Officer
and in various other senior executive leadership positions at multiple large companies. Mr. Costantino is currently serving as a
director and Chairman of the Audit Committee of Avenir Wellness Solutions, Inc. (OTC: AVRW), and several Yamaha Motor Finance
companies. He served as Senior Executive Vice President, Chief Financial Officer, and Chief Operating Officer of WFS Financial
(Nasdaq: WFSI), an automotive/commercial finance company from, while concurrently serving as Executive Vice President, Chief
Financial Officer, and Chief Operating Officer of Westcorp (NYSE: WES), a regulated bank from 2005-2007. In each of these roles, Mr.
Costantino was responsible for operational and financial oversight, including SEC filings, investor relations, and treasury. Mr.
Costantino played a key role in negotiating the sale of both companies to Wachovia (Wells Fargo) for $3.9 billion. Prior to that, he
was President, Chief Executive Officer and a director of Mitsubishi Motors Credit of America, an automotive finance company with
over $10 billion in assets from 2002-2005, where he played a key role in improving profitability and negotiating the sale of the
company’s assets to Merrill Lynch. Prior to that, he served for 17 years in various management positions of increasing
responsibility at Volvo Cars of North America, including serving as Senior Vice President and Chief Financial Officer of both the
automotive parent company and the captive finance company. Mr. Costantino is also a retired Certified Public Accountant. Mr.
Costantino’s extensive executive leadership and financial experience, particularly in connection with publicly traded
companies, demonstrates his qualifications to serve on our Board of Directors.
 
Joseph
Jasper. Mr. Jasper has served as a director of the Company since August 20, 2018. He is a Chartered Financial Analyst who since
2018 has served as Chief Financial Officer and Chief Operating Officer for Windigo Logistics, Inc., a software-as-a-service company serving
contractors within the logistics industry. From 2005 to 2018, Mr. Jasper served as Chief Executive Officer of Vermillion Capital Management,
an institutional investment firm. From 2002 to 2005, Mr. Jasper was Managing Director and Director of Fixed Income Strategy and Marketing
for Piper Jaffray Company. Prior to 2002, he spent 20 years managing, structuring and selling fixed income and equity securities at several
leading investment banking firms, including U.S. Bancorp Libra and UBS PaineWebber. Mr. Jasper also serves as a director of Windigo Logistics,
GroundCloud Safety, LLC, and Vermilion Capital Management, all privately-held companies. He has previously served as a director or principal
advisor to many operating and venture-stage companies across a broad range of industries. Mr. Jasper received an MBA degree from the
University of St. Thomas, where he also served as an Adjunct Professor of Finance. Mr. Jasper’s extensive financing and accounting
expertise are material factors which demonstrate his qualifications to serve on our Board of Directors.
 

33
 

 
Diane
Levitan. Dr. Levitan’s wide-ranging career in veterinary medicine has spanned over three decades since receiving her Veterinariae
Medicinae Doctoris from the University of Pennsylvania School of Veterinary Medicine. She practiced internal medicine, emergency medicine,
and critical care at Tufts University School of Veterinary Medicine and later founded Peace Love Pets Veterinary Care, PLLC in Commack,
New York, a small animal veterinary care general practice that also specializes in internal medicine, diagnostic ultrasound endoscopy,
and minimally invasive surgery. Dr. Levitan has served on the board of many veterinary medicine organizations, such as the New York Board
of Regent’s Board for Veterinary Medicine, the American College of Hyperbaric Medicine, the American College of Veterinary Internal
Medicine Foundation, and the International Veterinary Academy of Pain Management. Dr. Levitan has also served as a subject matter expert,
consultant, and advisor to multiple businesses in the veterinary medicine industry. Dr. Levitan’s career has also extended into
education, including her current position as Associate Professor of Veterinary Skills at Long Island University College of Veterinary
Medicine and serving as a lecturer for Merial and Pfizer Animal Pharmaceutical companies on leptospirosis, other diseases, and vaccinations.
Dr. Levitan has also been a prolific author and media contributor in the world of veterinary medicine. She has published many articles
in professional journals and texts on subjects such as hyperbaric oxygen therapy and endoscopy, as well as in consumer publications such
as the New York Times. She has also made many radio and television appearances, including being a Merck Animal Health Media Spokesperson
and appearing on CNN as a veterinary expert. Additionally, Dr. Levitan is the founder and president of Helping Promote Animal Welfare,
Inc. (Helping PAW), a 501(c)(3) tax-exempt public charity focused on ending pet overpopulation through education to the public and offering
general veterinary health care services. Dr. Levitan’s extensive experience as a veterinarian is a material factor that demonstrates
her qualifications to serve on our Board of Directors.
 
James
Martin. Mr. Martin has served as a director of the Company since July 2019. He is a retired Certified Public Accountant and attorney
whose career included his responsibility as Partner in Charge of KPMG LLP’s tax practice for its Newport Beach, California office.
In that role, he provided and oversaw the rendition of tax services for numerous clients in varied industries. He retains his AICPA membership
and holds Accounting and Law Degrees from the University of Washington and, on a Fellowship, received a Master of Laws Degree from New
York University. Mr. Martin’s extensive accounting expertise is a material factor which demonstrate his qualifications to serve
on our Board of Directors.
 
Robert
Rudelius. Mr. Rudelius has served as a director of the Company since August 2018. Currently, he is the Chief Executive Officer
and Managing Director of Noble Ventures, LLC, a company he founded in 2001 that provides advisory and consulting services to early and
mid-stage companies in the information technology, communications, medical technology, and social e-commerce industries. He is also the
co-founder, President & CEO of MedicaMetrix, Inc., a company that is building a commercialization engine that will launch a stream
of medical devices aimed at delivering transformative healthcare solutions for unmet medical needs. From April 1999 through May 2001,
when it was acquired by StarNet L.P., Mr. Rudelius was the founder and CEO of Media DVX, Inc., a start-up business that provided a satellite-based,
IP-multicasting alternative to transmitting television commercials via analog videotapes to television stations, networks, and cable
television operators throughout North America. From April 1998 to April 1999, Mr. Rudelius was the President and Chief Operating Officer
of Control Data Systems, Inc., during which time Mr. Rudelius reorganized and re-positioned the software company as a professional technology
services company, resulting in the successful sale of the company to British Telecom. From October 1995 through April 1998, Mr. Rudelius
was the founding Managing Partner of AT&T Solutions, Inc., a subsidiary of AT&T Inc. (NYSE: T), and headed the Media, Entertainment
& Communications industry practice. From January 1990 through September 1995, Mr. Rudelius was a partner in McKinsey & Company’s
information, technology, and systems practice, during which time he headed the practice in Japan and the United Kingdom. Mr. Rudelius
began his career at Arthur Andersen & Co. where he was a leader in the firm’s financial accounting systems consulting practice.
Mr. Rudelius served as a member of the Axogen, Inc. (NASDAQ: AXGN) Board of Directors for ten years from September 2010 through September
30, 2020, where he served on the audit committee and as a member of the compensation committee. Mr. Rudelius has an M.B.A. from the Kellogg
School of Management at Northwestern University and a B.S. in mathematics and economics from Gustavus Adolphus College in St. Peter,
Minnesota. Mr. Rudelius’ qualifications to serve on our Board of Directors include his extensive executive leadership and financial
experience, particularly in connection with rapid growth technology businesses, and his experience as a director of publicly traded companies.
 

34
 

 
Family
Relationships
 
There
are no family relationships between executive officers or directors of the Company.
 
Skills
and Qualifications of the Directors
 
The
Board believes that the qualifications of the directors, as set forth in their biographies, which are listed above, give them the qualifications
and skills to serve as directors of the Company.
 
CORPORATE
GOVERNANCE
 
Director
Independence
 
During our fiscal year ended March 31, 2024, our common stock and warrants were listed on The Nasdaq Capital Market, or Nasdaq, under the symbols “PETV”
and “PETVW,” respectively. Under Nasdaq Rule 5605 (“Nasdaq Rules”), independent directors must comprise a majority
of a listed company’s board of directors.
 
Our
Board of Directors has affirmatively determined, after considering all the relevant facts and circumstances, that each of Spencer Breithaupt,
Robert Costantino, Joseph Jasper, James Martin, Diane Levitan, and Robert Rudelius are independent, as “independence” is
defined under the applicable rules and regulations of the SEC and the listing standards of Nasdaq, and does not have a relationship with
us (either directly or as a partner, stockholder, or officer of an organization that has a relationship with us) that would interfere
with their exercise of independent judgment in carrying out their responsibilities as directors. Accordingly, a majority of our directors
are independent, as required under the applicable Nasdaq rules.
 
Delinquent
Section 16(a) Reports
 
Section
16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock,
to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide
us with copies of those filings. To the Company’s knowledge, based solely on a review of the Form 3’s, 4’s and 5’s
electronically filed with the SEC during fiscal 2023, all such filing requirements applicable to the Company’s directors, executive
officers, and greater than 10% beneficial owners were complied with.
 
Committees
of the Board of Directors
 
We
have an Audit Committee, Compensation Committee, and Nominating Committee. Our Audit Committee consists of three independent directors
who are Robert Costantino (Chair), Joseph Jasper, and James Martin. Our Compensation Committee consists of three independent directors
who are Robert Rudelius (Chair), Spencer Breithaupt, and Robert Costantino. Our Nominating Committee consists of three independent
directors who are Joseph Jasper (Chair), Robert Rudelius, and Diane Levitan.
 
Code
of Ethics
 
We
have adopted a Code of Ethics which applies to our board of directors, executive officers, and other employees. Our Code of Ethics outlines
the broad principles of ethical business conduct we have adopted, including subject areas such as confidentiality, conflicts of interest,
corporate opportunities, public disclosure reporting, protection of company assets, and compliance with applicable laws. A copy of our
Code of Ethics is available without charge to any person by written request to us at our principal offices at 5251 Edina Industrial Blvd.,
Edina, MN 55439.
 

35
 

 
Director
Compensation
 
The
following table provides information on compensation paid to our non-employee directors for their services as members of our board of
directors during our fiscal year ended March 31, 2024:
 


Name of Director 
Fees paid in cash ($)  
Stock awards ($)(1)  
Option awards ($)(2)  
All other compensation ($)  
Total ($) 

Robert Costantino 
$—  
$—  
$27,626  
$—  
$27,626 

Joseph Jasper 
$—  
$—  
$27,626  
$—  
$27,626 

James Martin 
$—  
$—  
$29,468  
$—  
$29,468 

Robert Rudelius 
$—  
$—  
$27,626  
$—  
$27,626 

Spencer Breithaupt 
$—  
$—  
$71,353  
$—  
$71,353 

Diane Levitan 
$—  
$—  
$31,255  
$—  
$31,255 

Scott Johnson(3) 
$8,750  
$—  
$—  
$—  
$8,750 

Leslie Coolidge(3) 
$9,375  
$—  
$—  
$—  
$9,375 

 


(1)
The
    value in this column reflects the aggregate grant date fair value of the stock award as computed in accordance with ASC Topic 718.
    Information regarding the valuation assumptions used in the calculations are included in “Note 11 – Stockholder’s
    Equity” to our audited consolidated financial statements included in our 2024 Form 10-K.

 
 

(2)
The
    value in this column reflects the aggregate grant date fair value of the stock options as computed in accordance with ASC Topic 718.
    Information regarding the valuation assumptions used in the calculations is included in “Note 11 – Stockholder’s
    Equity” to our audited consolidated financial statements included in our 2024 Form 10-K. As of March 31, 2024, the aggregate
    number of options outstanding (vested and unvested) for Mr. Costantino, Mr. Jasper, Mr. Martin, Mr. Rudelius, Mr. Breithaupt, and
    Ms Levitan was 66,467, 62,355, 66,062, 62,355, 50,747, and 35,954 respectively.

 
 

(3)
Ms. Coolidge and Mr. Johnson were no longer Board members, effective as of November 17, 2023.

 
General
Policy Regarding Compensation of Non-Employee Directors
 
Directors
who are not employees of the Company are paid director’s fees, in cash, stock options, or a combination thereof. In fiscal 2024,
all compensation was paid with stock options.
 
ITEM
11. EXECUTIVE COMPENSATION
 
The
Company qualifies as a “smaller reporting company” under rules adopted by the SEC. Accordingly, the Company has provided
scaled executive compensation disclosure that satisfies the requirements applicable to the Company in its status as a smaller reporting
company. Under the scaled disclosure obligations, the Company is not required to provide, among other things, a compensation discussion
and analysis or a compensation committee report, and certain other tabular and narrative disclosures relating to executive compensation.
 
Our
named executive officers (“Named Executive Officers” or “NEO’s”) for fiscal year ended March 31, 2024 (“fiscal
2024”) were as follows:
 

●John
                                            Lai, our Chief Executive Officer and President;

●Garry
                                            Lowenthal, our Chief Financial Officer; 

 ●Robert J. Folkes, our former Chief Financial Officer; and

●Randall
                                            Meyer, our Chief Operating Officer.
 
Certain
information regarding the compensation of our Named Executive Officer for our fiscal years ended March 31, 2024 (“fiscal 2024”)
and March 31, 2023 (“fiscal 2023”) is provided on the following pages.
 

36
 

 
SUMMARY
COMPENSATION TABLE
 
The
following table sets forth information regarding the compensation paid to or earned by our Named Executive Officers for fiscal 2024 and
2023.
 


Name and Principal Position 
Year 
Salary ($)(1)      
Bonus ($)  
Stock Awards ($)(2)    
Non-Equity Incentive Plan Compensation ($)  
All Other Compensation ($)(3)    
Total ($) 

John Lai 
2024 
 350,000  
 —  
 143,500  
 —  
$3,912  
$497,412 

CEO and President 
2023 
 306,260  
 —  
 175,000  
 —  
$6,387  
$487,637 

  
  
    
    
    
    
    
   

Garry Lowenthal 
2024 
 22,778  
 10,000(7) 
 —  
 —  
 —  
 32,778 

Chief Financial Officer(6) 
2023 
 —  
 —  
 —  
 —  
 —  
 — 

  
  
    
    
    
    
    
   

Robert J Folkes 
2024 
 58,923  
 —  
 14,980  
 —  
$13,657  
$87,560 

Former
    Chief Financial Officer(4) 
2023 
 265,000  
 —  
 —  
 439,206  
$8,066  
$712,272 

  
  
    
    
    
    
    
   

Randall Meyer 
2024 
 270,000  
 —  
 23,184  
 —  
$12,912  
$306,096 

Chief Operating Officer(5) 
2023 
 240,833  
 —  
 —  
 —  
$4,581  
$245,414 

 


(1)
In
    lieu of receiving cash in the amount of $29,167 for one month’s salary payment, Mr. Lai received an aggregate of 10,100 shares
    of the Company’s common stock. The stock was valued at a price of $2.8878 per share in fiscal year 2023.

 
 

(2)
Amounts
    shown represent grant date fair value computed in accordance with ASC Topic 718, with respect to restricted stock awards (based on
    the closing price of our common stock on the grant date) and stock option awards. Information
    regarding the valuation assumptions used in the calculations is included in “Note 11 – Stockholder’s Equity”
    of our audited consolidated financial statements included in our 2023 Form 10-K.

 
 

(3)
Represents
    the payment of health insurance premiums by the Company for Mr. Lai and Mr. Folkes.

 
 

(4)
Mr.
    Folkes was appointed to serve as the Company’s Chief Financial Officer on April 14, 2021 and resigned as of February 29, 2024.
    

 
 

(5)
Mr.
    Meyer was appointed to serve as the Company’s Chief Operating Officer on September 10, 2021.

 
 

(6)
Mr.
    Lowenthal was appointed to serve as the Company’s Chief Financial Officer on March 8, 2024.

 
 

(7)
Mr.
                                            Lowenthal received a $10,000 signing bonus with his employment contract.


 
Narrative
Disclosure to the Summary Compensation Table
 
The
following is a discussion of certain terms that we believe are necessary to understand the information disclosed in the Summary Compensation
Table.
 
Base
Salaries
 
The
Company’s Named Executive Officers receive a base salary for services rendered to the Company, which is set forth in their respective
employment agreements. The base salary payable to each Named Executive Officer is intended to provide a fixed component of compensation
reflecting the executive’s skill set, experience, role, and responsibilities.
 
John
Lai
 

Mr. Lai has served as our Chief Executive Officer from March 2014 to May 2017 and June 2019 to the present. Mr. Lai’s base
salary was $100,000 from April 1, 2022, which was increased to $275,000 effective as of September 1, 2022 and increased to $350,000
as of November 1, 2022. 
 
In
February 2023, Mr. Lai agreed that he would receive his salary payments in shares of the Company’s common stock in lieu of cash
from March 1, 2023 through August 31, 2023 (the “Interim Period”) The Compensation Committee approved issuing 60,600 Shares
(the “Total Interim Shares”) to Mr. Lai for his service during the Interim Period as a restricted stock award unit agreement
(“RSU Award Agreement”) under the Equity Incentive Plan. The Compensation Committee calculated the number of Total Interim
Shares by taking (A) Mr. Lai’s salary during the Interim Period ($175,000) divided by (B) the volume weighted average closing price
of the Company’s common stock during the 10-day period preceding February 22, 2023 ($2.8878), rounded up to the nearest whole share.
The Compensation Committee approved the vesting of 10,100 of the RSU’s on March 1, 2023, with an additional 10,100 of the RSU’s
vesting on the first day of each month thereafter such that all of the RSU’s would be fully vested on August 1, 2023, subject to
Mr. Lai’s continued employment with the Company through each applicable vesting date. Additional terms of the RSU Award Agreement
are set forth in the Equity Incentive Plan.
 
Garry Lowenthal
 
Mr.
Lowenthal joined the Company as its Chief Financial Officer on March 8, 2024 and his salary is $200,000 per year, plus a $10,000 signing
bonus.
 
Robert J. Folkes
 
Mr. Folkes joined the Company
as its Chief Financial Officer on April 14, 2021, and his initial salary was $190,000 per year, which was increased to $240,000 per year
effective as of September 1, 2022 and increased to $300,000 as of November 1, 2022. Mr. Folkes resigned from the Company effective as
of February 7, 2024.
 
Randall Meyer
 
Mr. Meyer joined the Company, as its Chief Operating Officer, on September 1, 2021 and his base salary is $220,000
per year which was increased to $270,000 as of November 1, 2022.
 

37
 

 
Bonuses
 
The
Company established a bonus plan for its Named Executives with a performance target based on total revenues in each fiscal year. If
the Company achieved the performance target for the target fiscal year, the Named Executives would receive a bonus equal to a certain percentage of their
respective salary. 
 
In
November 2022, the Company established target bonuses for the bonus plan for its Named Executives with performance targets based on total
revenues and individual objectives for fiscal 2023. The Company did not achieve its revenue target for fiscal 2023, so the Named Executives
did not receive performance bonuses under the Bonus Plan. As such, the Compensation Committee did not award discretionary bonuses to
any Named Executive Officers in fiscal 2023.
 
In
November 2023, the Company established target bonuses for a bonus plan for its Named Executive Officers with performance targets based
on total revenues and individual objectives for fiscal 2024. The Company did not achieve its revenue target for fiscal 2024, so the Named
Executive Officers did not receive performance bonuses under the Bonus Plan.
 

38
 

 
Equity
Compensation
 
Our
Compensation Committee administers our 2020 Equity Incentive Plan (the “Equity Incentive Plan”) and approves the amount of,
and terms applicable to, grants of stock options, restricted stock units, and other types of equity awards to employees, including the
Named Executive Officers. The Equity Incentive Plan permits the grant of incentive stock options, non-statutory stock options, stock
appreciation rights, restricted stock, restricted stock units (“RSUs), and stock bonus awards (all such types of awards, collectively,
“equity awards”), although incentive stock options may only be granted to employees.
 
Fiscal 2022
 
On
April 14, 2021, the Company granted 34,000 RSUs to Mr. Folkes pursuant to the terms of his employment agreement. These RSUs vest over
a three-year period, with 10,000 RSUs vesting on January 1, 2022, 10,000 vesting on January 1, 2023, and 14,000 vesting on January 1,
2024, subject to Mr. Folkes remaining employed at the Company. These RSUs will automatically vest if there is a Change in Control (as
defined in our Equity Incentive Plan).
 
On
September 9, 2021, the Compensation Committee granted RSUs to Mr. Lai, Mr. Folkes, and Mr. Meyer for their exceptional performance in
assisting the Company in closing its public offering in which it raised $11.2 million in gross proceeds and listed its common stock and
warrants on the NASDAQ Capital Market. The Named Executive Officers received the following RSU grants (“November 2021 RSU Grants”):
Mr. Lai – 150,000 RSUs, Mr. Folkes – 54,000 RSUs, and Mr. Meyer – 65,000 RSUs. These RSUs vest in three installments,
with 1/3 vesting on March 31, 2022, 1/3 vesting on March 31, 2023, and 1/3 vesting on March 31, 2024, based upon continued employment
with the Company. These RSUs will automatically vest if there is a Change in Control (as defined in our Equity Incentive Plan).
 
Fiscal 2023
 
On
October 19, 2022 the Compensation Committee granted nonqualified stock options of 200,000 shares to Mr. Folkes the vest equally over
a three-year period with 66,667 shares beginning on October 19, 2022. These options will automatically vest if there is a Change in Control
(as defined in our Equity Incentive Plan).
 
On
February 24, 2023, the Compensation Committee entered into a second amendment to an employment agreement with Mr. Lai pursuant to which
it granted him equity in exchange for salary for the six-month period beginning on March 1, 2023 and ending on August 31, 2023. The Company
granted Mr. Lai totaling 60,600 shares, the Interim Shares, which vest in equal monthly amounts of 10,100 shares beginning March 1, 2023 in lieu of his salary
payments for a six-month period. For additional detail on the Interim Shares, see “Executive Employment Agreements.
 
Fiscal 2024
 
The Compensation Committee did
not grant options or stock awards to any Named Executive Officers during fiscal 2024.
 
For the grant date fair values of the options and RSUs, please see the Summary Compensation Table above.

 
Perquisites
 
We
offer health insurance to our Named Executive Officers on the same basis that these benefits are offered to our other eligible employees.
We offer a 401(k) plan to all eligible employees. The Company also provides other benefits to its Named Executive Officers on the same
basis as provided to all its employees, including vacation and paid holidays.
 

39
 

 
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END 2024
 
The
following table sets forth for each Named Executive Officer, information regarding outstanding equity awards as of March 31, 2024. Market
value is based on the closing stock price of $1.07 on March 31, 2024.
 


  
   
Option Awards  
Stock Awards 

Name 
Grant Date  
Number of securities underlying unexercised options exercisable (#)  
Number of securities underlying unexercised options unexercisable (#)  
Option exercise price ($)  
Option expiration date  
Number of shares or units of stock that have not vested (#)  
Market value of shares or units of stock that  have not vested ($)(1) 

John Lai 
 10/31/2019  
 90,000  
 —  
 2.24  
 10/31/2024  
 —  
$— 

  
 12/31/2019  
 19,847  
 —  
 1.95  
 12/31/2024  
 —  
 — 

  
 3/31/2020  
 24,253  
 —  
 1.27  
 3/31/2025  
 —  
 — 

  
 6/30/2020  
 7,441  
 —  
 1.60  
 6/30/2025  
 —  
 — 

  
 9/25/2021  
    
    
    
    
 100,500(2) 
 276,375 

  
    
    
    
    
    
    
   

Robert J. Folkes 
 10/19/2022  
 66,667(3) 
 133,333  
$2.40  
 10/18/2029  
    
   

  
 9/02/2021  
 —  
 —  
    
    
 32,000(4) 
$88,000 

  
    
    
    
    
    
    
   

Garry Lowenthal (6) 
 —  
 —  
 —  
 —  
 —  
 —  
$— 

  
    
    
    
    
    
    
   

Randall Meyer 
 1/15/2020  
 10,547  
 —  
 1.20  
 1/15/2029  
 —  
$— 

  
 12/31/2019  
 1,213  
 —  
 1.95  
 12/31/2024  
 —  
 — 

  
 3/31/2020  
 1,104  
 —  
 1.27  
 3/31/2025  
 —  
 — 

  
 6/30/2020  
 559  
 —  
 1.60  
 6/30/2025  
 —  
 — 

  
 9/09/2021  
 —  
 —  
 —  
 —  
 21,666(5) 
 59,582 

 


(1)
The
    value reported for the RSUs was determined by multiplying the number of unvested RSUs by the closing market price of $2.75 of the
    Company’s common stock on March 31, 2023.

 
 

(2)
Comprised
    of 50,000 unvested shares underlying an RSU award granted on September 9, 2021, which will vest on March 31, 2024, and 50,500 unvested
    shares underlying an RSU award granted on February 24, 2023, which will vest in equal monthly installments of 10,100 shares beginning
    April 1, 2023, with both awards subject to the executive’s continued employment with the Company. The RSUs will vest automatically
    if there is a Change of Control (as defined in our Equity Incentive Plan).

 
 

(3)
Mr.
    Folkes was granted a nonqualified stock option grant on October 19, 2022 to purchase 200,000 shares of our common stock at an exercise
    price of $2.40 per share. The options have a seven-year life and vest 66,667 shares on October 19. 2022, 66,667 shares on October
    19, 2023, and 66,666 shares on October 19, 2024. The options will vest automatically if there is a change of control (as defined
    in our Equity Incentive Plan). 

 
 

(4)
Comprised
    of 14,000 unvested shares underlying an RSU award granted on April 14, 2021, which will vest on January 1, 2024, and 18,000 unvested
    shares underlying an RSU award granted on September 9, 2021, which will vest on March 31, 2024, with both RSU awards subject to the
    executive’s continued employment with the Company. The RSUs will vest automatically if there is a change of control (as defined
    in our Equity Incentive Plan).

 
 

(5)
Comprised
    of 21,666 unvested shares underlying an RSU award granted on September 9, 2021, which will vest on March 31, 2024, subject to the
    executive’s continued employment with the Company. The RSUs will vest automatically if there is a Change of Control (as defined
    in our Equity Incentive Plan).

 
 

(6)
Mr.
    Lowenthal employment began on March 8, 2024. No stock grants or any RSUs were issued in fiscal year 2024.

 

40
 

 
Executive
Employment Agreements
 

Effective
as of November 10, 2021, the Company entered into new employment agreements with Mr. Lai to serve as the Company’s Chief
Executive Officer which replaced his employment agreement dated October 1, 2019, and Mr. Folkes to serve as the Chief Financial
Officer which replaced his employment agreement dated April 14, 2021. In addition, the Company entered into a new employment agreement with Randall
Meyer to serve as the Company’s Chief Operating Officer effective as of November 10, 2021. All of these employment agreements
were amended in November 2022 to increase the base salaries of the executive officers, effective as of November 1, 2022. In
addition, Mr. Lai’s employment agreement was amended in February 2023 to provide that he would receive his salary payments in
the form of equity instead of cash for the six-month period beginning on March 1, 2023 through August 31, 2023. With the exception
of the salary and severance payments, the employment agreements are substantially similar.
 
All
of these employment agreements expire on September 30, 2024. Messrs. Lai, Folkes, and Meyer each have annual base salaries of $350,000,
$300,000, and $270,000, respectively, subject to potential increase or decrease from time to time as determined by the Compensation Committee
of the Board of Directors. As previously noted, Mr. Lai received his salary payments in shares of the Company’s common
stock from March 1, 2023 through August 31, 2023. The Compensation Committee approved issuing 60,600 Shares (the “Total Interim
Shares”) to Mr. Lai for his service during the Interim Period as a restricted stock award unit agreement (“RSU Award Agreement”)
under the Company’s Equity Incentive Plan. The Compensation Committee calculated the number of Total Interim Shares by taking (A)
Mr. Lai’s salary during the Interim Period ($175,000) divided by (B) the volume-weighted average closing price of the Company’s
common stock during the 10-day period preceding February 22, 2023 ($2.8878), rounded up to the nearest whole share. The Compensation
Committee approved the vesting of 10,100 of the RSUs on March 1, 2023, with an additional 10,100 of the RSUs vesting on the first day
of each month thereafter such that all of the RSUs would be fully vested on August 1, 2023, subject to Mr. Lai’s continued employment
with the Company through each applicable vesting date. Additional terms of the RSU Award Agreement are set forth in the Equity Incentive
Plan.
 
The
employment agreements also provide for a target annual bonus as determined by the Compensation Committee. In addition to an annual salary
and bonus, the employment agreements provide that the executive officers are entitled to participate in any equity and/or long-term compensation
programs established by the Company for senior executive officers and all of the Company’s retirement, group life, health, and
disability insurance plans and any other employee benefit plans.
 
The
employment agreements provide for termination of the executive officers at any time by the Company for Cause (as defined in the employment
agreements) or without Cause. If an executive officer is terminated for Cause, he will receive his salary through the termination date
and reimbursement of any unpaid expenses and accrued but unused vacation/paid time off (“Accrued Obligations”). If the executive
officer’s employment is terminated by the Company without Cause, subject to the execution of a release of any and all claims or
potential claims against the Company, the executive officer will be entitled to receive a severance payment, his accrued but unpaid bonus,
if any, and any Accrued Obligations owed through the termination date, in a lump sum payment within 10 days after the termination date.
Mr. Folkes will receive a severance payment equal to 6 months of his base salary. Mr. Lai and Mr. Meyer will each receive a severance
payment equal to 1 month’s base salary. If the executive’s employment is terminated as a result of his death or disability,
he or his estate will receive his compensation through the date of termination, his accrued and unpaid bonus, if any, and Accrued Obligations
through the date of termination.
 

41
 

 
Each
executive officer is required to agree to non-competition, non-solicitation, and confidentiality obligations. The confidentiality covenants
are perpetual, while the non-compete and non-solicitation covenants apply during the term of the new employment agreements and for 12
months following the executive officer’s termination.
 
On
January 19, 2024, Robert J. Folkes informed the Board of Directors (the “Board”) of PetVivo Holdings, Inc. (the “Company”)
that he will be resigning as Chief Financial Officer (“CFO”) of the Company, effective as of February 2, 2024. Mr. Folkes
informed the Board that he will continue to provide CFO and accounting services to the Company, until it hires a new full-time Chief
Financial Officer. The Company and Mr. Folkes intend on entering into a transition services agreement on or before February 2, 2024.
 
On
March 8, 2024, PetVivo Holdings, Inc. (the “Company”) appointed Garry Lowenthal to serve as the Company’s Chief Financial
Officer, with an annual salary of $200,000 per year, plus a $10,000 signing bonus with a term of three years. Mr. Lowenthal was also
granted 90,000 RSU shares vesting at 45,000 shares on January 28, 2025 and 45,000 shares on January 28, 2026.
 
Potential
Payments on Change in Control or Termination without Cause under November RSU Grants
 
The
employment agreements for Mr. Lai, Mr. Lowenthal, and Mr. Meyer do not contain any provisions providing for the acceleration of any salary
or bonus payments if there is a change in control. The RSU Grants awarded to Mr. Lai, Mr. Folkes, and Mr. Meyer on September 9, 2021,
and to Mr. Folkes on April 14, 2021 pursuant to our Equity Incentive Plan contain provisions that provide for accelerated vesting of
the RSUs if there is a change of control of the Company (as such term is defined in the Equity Incentive Plan). In addition, if Mr. Lai,
Mr. Folkes, or Mr. Meyer is terminated without cause, any RSUs that would have vested on or before the first anniversary of such termination
had the executive remained employed shall be accelerated and deemed to have vested as of the termination date. Any time-based Restricted
Shares that have not vested as described above may not be transferred and will be forfeited on the date the Named Executive Officer’s
employment with the Company terminates.
 
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
As
of June 28, 2024 (the “Record Date”), we had 19,868,852 shares of our common stock issued and outstanding. The following
table sets forth, as of the Record Date, information concerning the beneficial ownership of shares of our common stock held by our directors,
our named executive officers, our directors, and executive officers as a group, and each person known by us to be a beneficial owner
of more than 5% of our outstanding common stock. Unless otherwise indicated, the business address of each of our directors, executive
officers, and beneficial owners of more than 5% of our outstanding common stock is c/o PetVivo Holdings, Inc., 5151 Edina Industrial
Blvd., Edina, MN 55439. Each person has sole voting and investment power with respect to the shares of our common stock, except as otherwise
indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
 


Name of Beneficial Owner(1) 
Number of Shares Beneficially Owned  
Beneficial Ownership (%) 

John Lai (2) 
 1,440,507  
 7.25%

Garry Lowenthal (3) 
 0  
 *  

Randall Meyer (4) 
 620,325  
 3.12%

James Martin (5) 
 182,341  
 * 

Joseph Jasper (6) 
 91,034  
 * 

Diane Levitan (7) 
 35,954  
 * 

Robert Rudelius (8) 
 223,748  
 1.13%

Robert Costantino (9) 
 41,483  
 * 

Spencer Breithaupt(10) 
 30,508  
 * 

All Directors and Executive Officers as a Group (9 Persons) (11) 
 2,665,900  
 13.42%

  
    
   

Owners of more than 5% of our Stock 
    
   

Alan Sarroff (12) 
 2,718,544  
 13.70%

Stanley Cruden (13) 
 1,653,223  
 8.32%

 


*
Less
    than one percent.

 

42
 

 


(1)
    
Unless
    otherwise indicated, the business address of each officer and director of the Company is c/o PetVivo Holdings, Inc., 5151 Edina Industrial
    Boulevard, Suite 575, Minneapolis, MN 55439. 

 
 

(2)
    
Amount
    consists of 1,288,592 shares owned directly by Mr. Lai and warrants to purchase 141,815 shares and RSUs for 10,100 shares that are
    vested or will vest within 60 days of the Record Date.

 
 

(3)
Garry
    Lowenthal was granted 90,000 common shares to vest as follows: 45,000 shares on January 28, 2025and 45,000 shares on January 28,
    2026.

 
 

(4)
Amount
    consists of 606,902 shares that are owned directly by Mr. Meyer and includes warrants to purchase 13,423 shares that are vested or
    will vest within 60 days of the Record Date.

 
 

(5)
Amount
    includes 146,041 shares held by Mr. Martin directly, and 2,289 shares held by his personal holding company controlled by Mr. Martin
    and 113 shares held by his spouse and options held by Mr. Martin to purchase 33,898 shares at $1.06 per share that have vested or
    will vest within 60 days of the Record Date.

 
 

(6)
Amount
    includes 34,754 shares held by Mr. Jasper directly, and 2,000 shares held by his spouse and warrants to purchase 22,500 shares and
    options held by Mr. Jasper to purchase 31,780 shares at $1.06 per share that have vested or will vest within 60 days of the Record
    Date.

 
 

(7)
Amount
    consists of options held by Ms. Levitan to purchase 35,954 shares at $1.06 per share that have vested or will vest within 60 days
    of the Record Date.

 
 

(8)
Amount
includes 172,280 shares held by Mr. Rudelius directly, in his IRA, and by Noble Ventures, LLC,a company controlled by Mr. Rudelius and
warrants to purchase 19,688 shares and stock options to purchase 31,780 shares that are vested or will vest within 60 days of the Record
Date.

 
 

(9)
Amount
    includes 9,703 shares held by Mr. Costantino directly and options held by Mr. Costantino to purchase 31,780 shares at $1.06 per share
    that have vested or will vest within 60 days of the Record Date.

 
 

(10)
Amount
    consists of options held by Mr. Breithaupt to purchase 30,508 shares at $1.06 per share that have vested or will vest within 60 days
    of the Record Date.

 
 

(11)
Amount
    includes 2,665,900 shares held by the Named Executive Officers directly warrants, stock options and RSUs held by all of our Named
    Executive Officers and directors, as a group, to purchase and or vest an aggregate of 396,766 shares that are vested or will vest
    within 60 days of the Record Date.

 
 

(12)
As
    reported in Mr. Sarroff’s Schedule 13G filed with the SEC on May 15, 2024, reported ownership as A.L. Sarroff Fund, LLC,. Mr.
    Sarroff’s directly owns 2,718,544 common shares and 2,138,696 warrants as follows: The Warrants are exercisable on the following
    schedule: $1,166,000.00 exercisable as of August 4, 2026, 111,000 exercisable as of December 6, 2026, and 861,696 as of April 29,
    2027.

 
 

(13)
As
    reported in Mr. Cruden’s Schedule 13G filed with the SEC on May 30, 2024, Mr. Cruden directly owns 1,653,223 common shares.

 
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
 
The
following is a summary of the transactions since April 1, 2020 between the Company and its executive officers, directors, nominees for
directors, principal shareholders, and related parties involving amounts in excess of $120,000 or that the Company has chosen to voluntarily
disclose.
 
David
Masters
 
 Settlement Agreement 
 
David
Masters, a former employee, board member, and consultant to the Company, threatened to file suit against the Company to recover in
excess of $2 million in 2022 Masters’ threatened litigation relates to allegations that the Company promised him additional
compensation, shares, warrants, and future employment while he was associated with the Company. The Company mediated these claims
with Masters in 2022 and executed a mediated settlement agreement resolving these claims for a one-time payment of $180,000, to be
effective upon execution of a long form agreement containing these and other settlement terms. The parties appointed the mediator as
arbitrator to resolve any disputes arising during the drafting of the long form agreement on commercially reasonable terms. In early
2023, Masters commenced arbitration to have certain terms in the long form agreement decided. The arbitrator issued an award setting
the final terms of the agreement.
 
In
September 2023, Masters executed the long-term agreement, and the Company recorded a settlement expense of $180,000. The settlement was
paid in October 2023.
 

43
 

 
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
 
Auditor
Information:
 
Auditor
Name: Assurance Dimensions Inc.
PCAOB
ID - 5036
Location:
Margate, Florida
 
Audit
Fees
 
The
aggregate fees billed for the fiscal years ended March 31, 2024 and 2023 for professional services rendered by Assurance Dimensions Inc.,
the principal accountant for the audit of the Company’s annual financial statements included in our Form 10-K and review of our
quarterly unaudited financial statements or services that are normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal years were $118,500 and $40,500 respectively. Assurance Dimensions provided services for the
years ended March 31, 2024 and March 31, 2023.
 
Audit-Related
Fees
 
For
the fiscal years ended March 31, 2024 and 2023, there were no fees billed for services reasonably related to the performance of the audit
or review of the financial statements outside of those fees disclosed above under “Audit Fees.”
 
Tax
Fees
 
For
the fiscal years ended March 31, 2024, and 2023, there were no fees billed for services for tax compliance, tax advice, and tax planning
work by our principal accountants.
 
All
Other Fees
 
None.
 
Pre-Approval
Policies and Procedures
 
The
Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent public accountants.
These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided
for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to
a specific budget. Assurance Dimension and management are required to periodically report to the Audit Committee regarding the extent
of services provided by the independent public accountants in accordance with this pre-approval, and the fees for the services performed
to date. The Audit Committee may also pre-approve particular services on a case by case basis. The Audit Committee approved one hundred
percent (100%) of all services provided by Assurance Dimension during Fiscal 2024 and 2023.
 
The
Audit Committee has considered the nature and amount of the fees billed by Assurance Dimension, and believes that the provision of the
services for activities unrelated to the audit is compatible with maintaining the independence of Assurance Dimension.
 

44
 

 
PART
IV
 
ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 


(a)
    
Financial
    Statements.

 
Included
in Item 8
 


(b)
Exhibits
    required by Item 601.

 


 
3.1
    
Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 in the Company’s Registration Statement on Form S-8 filed with the SEC on June 17, 2022). 

 
 
 

 
3.2
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 in the Company’s Registration Statement on Form S-8 filed with the SEC on October 18, 2022).

 
 
 

 
4.1
Description of Registrant’s Securities*

 
 
 

 
10.1
Employment Agreement effective as of November 10, 2021 between PetVivo Holdings, Inc. and John Lai, as amended in November 1, 2022 and February 24, 2023 (incorporated by reference to Exhibit 10.1 in the Company’s Annual Report on Form 10-K for fiscal 2023 filed with the SEC on June 29, 2023).+

 
 
 

 
10.2
Employment Agreement effective as of November 10, 2021 between PetVivo Holdings, Inc. and Robert Folkes, as amended in November 1, 2022. (incorporated by reference to Exhibit 10.2 in the Company’s Annual Report on Form 10-K for fiscal 2023 filed with the SEC on June 29, 2023).+

 
 
 

 
10.3
Employment Agreement effective as of November 10, 2021 between PetVivo Holdings, Inc. and Randall Meyer, as amended in November 1, 2022 (incorporated by reference to Exhibit 10.3 in the Company’s Annual Report on Form 10-K filed with the SEC on June 29, 2023).+

 
 
 

 
10.4
Employment Agreement and Restricted Stock Award Agreement, dated March 8, 2024, between PetVivo Holdings, Inc. and Garry Lowenthal (incorporated by reference to Exhibit 10.1 in the Company’s Form 8-K filed with the SEC on March 14, 2024)

 
 
 

 
10.5
PetVivo, Inc. 2020 Equity Compensation Plan (incorporated by reference to Appendix B in the Company’s Definitive Information Statement filed with the SEC on September 1, 2020).+

 
 
 

 
10.6
Form of Stock Option Agreement for use with the PetVivo Holdings, Inc. Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 in the Company’s Annual Report on Form 10-K for fiscal 2022 filed with the SEC on June 24, 2022).+

 
 
 

 
10.7
Form of Restricted Stock Unit Award Agreement for use with PetVivo Holdings, Inc. Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.6 in the Company’s Annual Report on Form 10-K for fiscal 2022 filed with the SEC on June 24, 2022).+

 
 
 

 
10.8
Distribution Services Agreement made as of June 17, 2022 by and between MWI Veterinary Supply Co, Inc. and PetVivo Holdings, Inc. (incorporated by reference to Exhibit 10.1 in the Company’s Quarterly Report on 10-Q filed with the SEC on August 11, 2022).

 
 
 

 
10.9
First Amendment to Distribution Services Agreement between PetVivo Holdings,Inc. and MWI Veterinary Supply Company (incorporated by reference to Exhibit 10.2 in the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, filed with the SEC on February 12, 2024).

 
 
 

 
10.10
Distribution Services Agreement effective as of January 1, 2024 between PetVivo Holdings, Inc. and Covetrus North America, LLC. (incorporated by reference to Exhibit 10.1 in the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, filed with the SEC on February 12, 2024).

 
 
 

 
10.11
Lease dated January 10, 2023 by and between PetVivo Holdings, Inc. and Dewey AL L.L.C. and Dewey MS L.L.C* (incorporated by reference to Exhibit 10.8 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 filed with the SEC on June 29, 2023).

 

45
 

 


 
10.12
Confidential Settlement and Mutual Release Agreement entered into on September 8, 2023 by and between PetVivo Holdings, Inc. and David B. Masters (incorporated by reference to Exhibit 10.1 in the Company’s Report on Form 8-K filed with the SEC on September 13, 2023).

 
 
 

 
10.13
Consulting Agreement effective September 1, 2020 by and between PetVivo Holdings, Inc. and David B. Masters (incorporated by reference to Exhibit 10.4 in the Company’s Report on Form 8-K filed with he SEC on September 19, 2020).

 
 
 

 
21.1
List of Subsidiaries (incorporated by reference to Exhibit 21.1 in the Company’s Annual Report on Form 10-K for fiscal 2022 filed with the SEC on June 24, 2022).

 
 
 

 
23.1
    
Consent of Assurance Dimensions, Inc.* 

 
 
 

 
31.1
Certification of Principal Executive Officer Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended, As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002*

 
 
 

 
31.2
Certification of Principal Financial Officer Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended, As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002*

 
 
 

 
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 
 
 

 
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 
 
 

 
97.1
Petvivo Holdings, Inc. Clawback Policy.*+

 
 
 

 
101.INS*
Inline
    XBRL Instance Document

 
 
 

 
101.SCH*
Inline
    XBRL Taxonomy Extension Schema

 
 
 

 
101.CAL*
Inline
    XBRL Taxonomy Extension Calculation Linkbase

 
 
 

 
101.DEF*
Inline
    XBRL Taxonomy Extension Definition Linkbase

 
 
 

 
101.LAB*
Inline
    XBRL Taxonomy Extension Label Linkbase

 
 
 

 
101.PRE*
Inline
    XBRL Taxonomy Extension Presentation Linkbase

 
 
 

 
104*
Cover
    Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 
*Filed
herewith
+
Indicates compensatory plan
 
ITEM
16. FORM 10-K SUMMARY
 
Not
Applicable.
 

46
 

 
ITEM
17.
 
SIGNATURES
 
Pursuant
to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
 


 
PetVivo
                                            Holdings, Inc., 


 
a
    Nevada corporation

 
 
 

June
    28, 2024
By:
    
/s/
    John Lai

 
 
John
    Lai

 
Its:
CEO,
                                            President and Director
(Principal
    Executive Officer)

 
 
 

June
    28, 2024
By:
    
/s/
    Garry Lowenthal

 
 
Garry
    Lowenthal

 
Its:
Chief
                                            Financial Officer
(Principal
    Financial and Accounting Officer)

 
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
 


/s/
    John Lai 
 
June
    28, 2024

John
    Lai
 
 

CEO,
    President, and Director
 
 

(Principal
    Executive Officer)
 
 

 
 
 

/s/
    Garry Lowenthal 
 
June
    28, 2024

Garry
    Lowenthal
 
 

Chief
    Financial Officer
 
 

 
 
 

/s/
    Spencer Breithaupt 
 
June
    28, 2024

Spencer
    Breithaupt
 
 

Director
 
 

 
 
 

/s/
    Diane Levitan 
 
June
    28, 2024

Diane
    Levitan
 
 

Director
 
 

 
 
 

/s/
    Robert Costantino 
 
June
    28, 2024

Robert
    Costantino
 
 

Director
 
 

 
 
 

/s/
    Joseph Jasper 
 
June
    28, 2024

Joseph
    Jasper
 
 

Director
 
 

 
 
 

/s/
    James Martin 
 
June
    28, 2024

James
    Martin
 
 

Director
 
 

 
 
 

/s/
    Robert Rudelius 
 
June
    28, 2024

Robert
    Rudelius
 
 

Director
 
 

 

47
 

 
PETVIVO
HOLDINGS, INC.
INDEX
TO FINANCIAL STATEMENTS
 
Audited
Financial Statements for the Years Ended March 31, 2024 and 2023
 


Report of Independent Registered Public Accounting Firm
F-2

Consolidated Balance Sheets – March 31, 2024 and 2023
F-3

Consolidated Statements of Operations for the Years Ended March 31, 2024 and 2023
F-4

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March 31, 2024 and 2023
F-5

Consolidated Statements of Cash Flows for the Years Ended March 31, 2024 and 2023
F-6

Notes to Consolidated Financial Statements
F-7

 

F-1 
 

 

 
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To
the Board of Directors and
Stockholders
of Petvivo Holdings, Inc.
 
Opinion
on the Consolidated Financial Statements
 
We
have audited the accompanying consolidated balance sheets of Petvivo Holdings, Inc. (the Company) as of March 31, 2024 and 2023, and
the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the years in the
two year period ended March 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended March
31, 2024, in conformity with accounting principles generally accepted in the United States of America.
 
Explanatory
Paragraph- Going Concern
 
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 10 to the consolidated financial statements, the Company has suffered recurring losses. For the year ended March 31, 2024, the
Company had a net loss of $10,955,295 and net cash used in operating activities of $7,419,588; and as of March 31, 2024 an accumulated
deficit of $82,799,324. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s
plans in regard to these matters are also described in Note 10. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 
Basis
for Opinion
 
These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.
 
Critical
Audit Matters
 
The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
 
We
did not identify any critical audit matters that need to be communicated.
 

 
We
have served as the Company’s auditor since 2019.
Margate,
Florida
June
28, 2024
 
ASSURANCE
DIMENSIONS, LLC
also
d/b/a McNAMARA and ASSOCIATES, LLC
TAMPA
BAY: 4920 W Cypress Street, Suite 102 | Tampa, FL 33607 | Office: 813.443.5048 | Fax: 813.443.5053
JACKSONVILLE:
4720 Salisbury Road, Suite 223 | Jacksonville, FL 32256 | Office: 888.410.2323 | Fax: 813.443.5053
ORLANDO:
1800 Pembrook Drive, Suite 300 | Orlando, FL 32810 | Office: 888.410.2323 | Fax: 813.443.5053
SOUTH
FLORIDA: 2000 Banks Road, Suite 218 | Margate, FL 33063 | Office: 754.800.3400 | Fax: 813.443.5053
www.assurancedimensions.com
 
“Assurance
Dimensions” is the brand name under which Assurance Dimensions, LLC including its subsidiary McNamara and Associates, LLC (referred
together as “AD LLC”) and AD Advisors, LLC (“AD Advisors”), provide professional services. AD LLC and AD Advisors
practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable laws, regulations,
and professional standards. AD LLC is a licensed independent CPA firm that provides attest services to its clients, and AD Advisors provide
tax and business consulting services to their clients. AD Advisors, and its subsidiary entities are not licensed CPA firms.

 


F-2 
 

 
PETVIVO
HOLDINGS, INC.
CONSOLIDATED
BALANCE SHEETS
 


  
March
    31, 2024  
March
    31, 2023 

Assets: 
    
   

Current Assets 
    
   

Cash and cash
    equivalents 
$87,403  
$475,314 

Accounts receivable, net
    of allowance for credit losses 
 18,669  
 86,689 

Inventory, net 
 390,076  
 370,283 

Prepaid
    expenses and other current assets 
 545,512  
 491,694 

Total Current Assets 
 1,041,660  
 1,423,980 

  
    
   

Property and Equipment, net 
 821,656  
 630,852 

  
    
   

Other Assets: 
    
   

Operating lease
    right-of-use assets 
 1,194,348  
 317,981 

Patents and trademarks,
    net 
 30,099  
 38,649 

Security
    deposit 
 27,490  
 27,490 

Total
    Other Assets 
 1,251,937  
 384,120 

Total
    Assets 
$3,115,253  
$2,438,952 

  
    
   

Liabilities and Stockholders’ Equity: 
    
   

  
    
   

Current Liabilities 
    
   

Accounts payable 
$821,230  
$588,713 

Accrued expenses 
 243,030  
 779,882 

Operating lease liability
    – current portion 
 190,589  
 78,149 

Notes
    payable and accrued interest-current portion 
 157,521  
 6,936 

Total Current Liabilities 
 1,412,370  
 1,453,680 

Other Liabilities 
    
   

Operating lease liability
    (net of current portion) 
 1,003,759  
 20,415 

Note
    payable and accrued interest (net of current portion) 
 13,171  
 239,832 

Total
    Other Liabilities 
 1,016,930  
 260,247 

Total
    Liabilities 
 2,429,300  
 1,713,927 

  
    
   

Commitments and Contingencies (see Note 10) 
 0  
 0 

  
    
   

Stockholders’ Equity: 
    
   

Preferred stock, par value $0.001 per share, 20,000,000 shares authorized,
    0 and 0 shares issued and outstanding at March 31, 2024 and March 31, 2023 
 -  
 - 

Common stock, par value $0.001 per share, 250,000,000 shares authorized,
    17,058,620 and 10,950,220 shares issued and outstanding at March 31, 2024 and March 31, 2023, respectively 
 17,059  
 10,950 

Common Stock to be Issued 
 -  
 137,500 

Additional Paid-In Capital 
 83,468,218  
 72,420,604 

Accumulated
    Deficit 
 (82,799,324) 
 (71,844,029)

Total
    Stockholders’ Equity 
 685,953  
 725,025 

Total
    Liabilities and Stockholders’ Equity 
$3,115,253  
$2,438,952 

 
The
accompanying notes are an integral part of these audited consolidated financial statements.
 

F-3 
 

 
PETVIVO
HOLDINGS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
 


  
   
  

  
Year Ended March 31, 

  
2024  
2023 

Revenues 
$968,706  
$917,162 

  
    
   

Cost of Sales 
 229,180  
 221,036 

Gross Profit 
 739,526  
 696,126 

  
    
   

Operating Expenses: 
    
   

  
    
   

Sales and Marketing 
 3,399,666  
 3,410,277 

Research and Development 
 1,268,014  
 996,358 

General and Administrative 
 6,693,186  
 5,022,943 

  
    
   

Total Operating Expenses 
 11,360,866  
 9,429,578 

  
    
   

Operating Loss 
 (10,621,340) 
 (8,733,452)

  
    
   

Other (Expense) Income 
    
   

Loss on Extinguishment of Debt 
 (534,366) 
 - 

Settlement Expense 
 (180,000) 
 - 

Extinguishment of payables 
 386,874  
 - 

Interest (Expense) Income 
 (6,463) 
 15,844 

Total Other (Expense) Income 
 (333,955) 
 15,844 

  
    
   

Loss before taxes 
 (10,955,295) 
 (8,717,608)

  
    
   

Net Loss 
$(10,955,295) 
$(8,717,608)

  
    
   

Net Loss Per Share: 
    
   

Basic and Diluted 
$(0.78) 
$(0.85)

  
    
   

Weighted Average Common Shares Outstanding: 
    
   

Basic and Diluted 
 13,969,754  
 10,222,994 

 
The
accompanying notes are an integral part of these audited consolidated financial statements.
 

F-4 
 

 
PETVIVO
HOLDINGS, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY 
 
Year
Ended March 31, 2024
 


  
   
   
   
   
   
  

  
Common Stock  
Additional
 Paid-in  
Accumulated  
Common
 Stock to be  
  

  
Shares  
Amount  
Capital  
Deficit  
Issued  
Total 

Balance at March 31, 2023 
 10,950,220  
$10,950  
$72,420,604  
$(71,844,029) 
$137,500  
$725,025 

Common stock sold 
 4,684,048  
 4,685  
 6,660,254  
 -  
 (137,500) 
 6,527,439 

Stock issued for services 
 890,500  
 891  
 1,489,950  
 -  
 -  
 1,490,841 

Return of stock issued for services 
 (250,000) 
 (250) 
 (537,250) 
 -  
 -  
 (537,500)

Conversion of debt and interest to common stock 
 549,340  
 549  
 700,206  
 -  
 -  
 700,755 

Value of stock and warrants on extinguishment of debt 
 -  
 -  
 509,310  
 -  
 -  
 509,310 

Cashless warrant exercise 
 34,678  
 34  
 (34) 
 -  
 -  
 - 

Vesting of restricted stock units in lieu of compensation 
 50,500  
 51  
 115,544  
 -  
 -  
 115,595 

Vesting of restricted stock units 
 149,334  
 149  
 (149) 
 -  
 -  
 - 

Stock based compensation 
 -  
 -  
 2,109,783  
 -  
 -  
 2,109,783 

  
 -  
 -  
 -  
 -  
    
   

Net loss 
 -  
 -  
 -  
 (10,955,295) 
 -  
 (10,955,295)

Balance at March 31, 2024 
 17,058,620  
$17,059  
$83,468,218  
$(82,799,324) 
$-  
$685,953 

 
Year
Ended March 31, 2023
 


  
Common Stock  
Additional
 Paid-in  
Accumulated  
Common
 Stock to be  
  

  
Shares  
Amount  
Capital  
Deficit  
Issued  
Total 

Balance at March 31, 2022 
 9,988,361  
$9,988  
$69,103,155  
$(63,126,421) 
$-  
$5,986,722 

Balance  
 9,988,361  
$9,988  
$69,103,155  
$(63,126,421) 
$-  
$5,986,722 

Common stock sold 
 610,011  
 610  
 1,388,635  
 -  
 -  
 1,389,245 

Cash paid to exercise warrants 
 48,664  
 49  
 66,509  
 -  
 -  
 66,558 

Stock issued for services 
 126,000  
 126  
 399,714  
 -  
 -  
 399,840 

Stock-based compensation 
 -  
 -  
 1,462,768  
 -  
 -  
 1,462,768 

Vesting of restricted stock units 
 177,184  
 177  
 (177) 
 -  
 -  
 - 

Common stock subscribed 
 -  
 -  
 -  
 -  
 137,500  
 137,500 

Net loss 
 -  
 -  
 -  
 (8,717,608) 
 -  
 (8,717,608)

Balance at March 31, 2023 
 10,950,220  
$10,950  
$72,420,604  
$(71,844,029) 
$137,500  
$725,025 

Balance  
 10,950,220  
$10,950  
$72,420,604  
$(71,844,029) 
$137,500  
$725,025 

 
The
accompanying notes are an integral part of these audited consolidated financial statements.
 

F-5 
 

 
PETVIVO
HOLDINGS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
 


  
   
  

  
For the Year Ended 

  
March 31, 2024  
March 31,2023 

CASH FLOWS FROM OPERATING ACTIVITIES 
    
   

Net Loss for the year 
$(10,955,295) 
$(8,717,608)

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: 
    
   

Stock-based compensation 
 2,109,783  
 1,462,768 

Depreciation and amortization 
 126,850  
 114,434 

Investor relations services paid in stock 
 452,432  
 507,600 

Consulting services paid in stock 
 405,221  
 - 

Stock issued in lieu of compensation 
 115,595  
 - 

Loss on extinguishment of debt 
 534,366  
 - 

Interest on convertible debentures 
 5,699  
 - 

Extinguishment of payables 
 (385,874) 
 - 

Changes in Operating Assets and Liabilities 
    
   

Decrease (increase) in prepaid expenses and other assets 
 41,870  
 (66,450)

Decrease (increase) in accounts receivable 
 68,020  
 (84,093)

Increase in inventory 
 (19,793) 
 (271,970)

Increase in accounts payable and accrued expenses 
 81,538  
 260,836 

Net Cash Used In Operating Activities 
 (7,419,588) 
 (6,794,483)

  
    
   

CASH FLOWS FROM INVESTING ACTIVITIES 
    
   

Purchase of equipment 
 (309,104) 
 (423,934)

Net Cash Used in Investing Activities 
 (309,104) 
 (423,934)

  
    
   

CASH FLOWS FROM FINANCING ACTIVITIES 
    
   

Proceeds from the sale of common stock and warrants 
 6,527,439  
 1,389,245 

Proceeds from issuance of convertible debentures 
 670,000  
 - 

Proceeds from issuance of note payable 
 150,000  
 - 

Proceeds from common stock to be issued 
 -  
 137,500 

Proceeds from exercise of warrants 
 -  
 66,558 

Repayments of notes payable 
 (6,658) 
 (6,399)

Net Cash Provided by Financing Activities 
 7,340,781  
 1,586,904 

Net (Decrease) Increase in Cash 
 (387,911) 
 (5,631,513)

Cash at Beginning of Year 
 475,314  
 6,106,827 

Cash at End of Year 
$87,403  
$475,314 

  
    
   

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: 
    
   

Cash Paid During The Year For: 
    
   

Interest 
$1,573  
$2,842 

SUPPLEMENTAL DISCLOSURE ON NON-CASH FINANCING AND INVESTING ACTIVITIES 
    
   

Convertible debentures and accrued interest converted to common stock 
$700,755  
$- 

Prepaid stock granted for investor relations services 
$216,978  
$399,840 

Increase to operating lease right of use asset and operating lease liability 
$876,367  
$88,013 

 
The
accompanying notes are an integral part of these audited consolidated financial statements.
 

F-6 
 

 
PetVivo
Holdings, Inc.
Notes
to Consolidated Financial Statements
March
31, 2024 and 2023
 
NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
 
(A)
Organization and Description
 
The
Company is in the business of licensing and commercializing our proprietary medical devices and biomaterials for the treatment and/or
management of afflictions and diseases in animals, initially for dogs and horses. The Company began commercialization of its lead product
Spryng™ with OsteoCushion™ Technology, a veterinarian-administered, intraarticular injection for the management of lameness
and other joint afflictions such as osteoarthritis in dogs and horses in September 2021. The Company has a pipeline of additional products
for the treatment of animals in various stages of development. A portfolio of nineteen patents protects the Company’s biomaterials,
products, production processes and methods of use. The Company’s operations are conducted from its headquarter facilities in suburban
Minneapolis, Minnesota.
 
(B)
Basis of Presentation
 
PetVivo
Holdings, Inc. (the “Company”) was incorporated in Nevada under a former name in 2009 and entered its current business in
2014 through a stock exchange reverse merger with PetVivo, Inc., a Minnesota corporation. This merger resulted in PetVivo, Inc. becoming
a wholly-owned subsidiary of the Company. In April 2017, the Company acquired another Minnesota corporation, Gel-Del Technologies, Inc.,
through a statutory merger, which is also a wholly-owned subsidiary of the Company.
 
(C)
Principles of Consolidation
 
The
accompanying consolidated financial statements include the accounts of the Company and its two wholly-owned Minnesota corporations, Gel-Del
Technologies, Inc. and PetVivo, Inc. All intercompany accounts have been eliminated during consolidation.
 
(D)
Use of Estimates
 
In
preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates include collectability of accounts receivable, inventory obsolescence, estimated useful lives and potential impairment
of property and equipment and intangibles, estimate of fair value of share-based payments, distributor rebate payable, provision for
product returns, right of use lease assets and liabilities and valuation of deferred tax assets.
 
(E)
Cash and Cash Equivalents
 
The
Company considers all highly-liquid, temporary cash investments with original maturity of three months or less to be cash equivalents.
The Company had no cash equivalents at March 31, 2024.
 
(F)
Concentration Risk
 
The
Company maintains its cash with various financial institutions, which at times may exceed federally insured limits. At March 31, 2024
and 2023, the Company did not have cash balances in excess of the federally insured limits.
 

F-7 
 

 
(G)
Accounts Receivable
 
Accounts
receivable consists primarily of amounts due from a distributor (see revenue recognition). Accounts receivable is recorded based on management’s
assessment of the expected consideration to be received, based on a detailed review of historical collections. Management relies on the
results of the assessment, which includes payment history of the applicable payer as a primary source of information in estimating the
collectability of our accounts receivable as well as a forecast of projected credit losses. We update our assessment on a quarterly basis,
which to date has not resulted in any material adjustments to the valuation of our accounts receivable since all receivables to date
have been collected. We believe the assessment provides reasonable estimates of our accounts receivable valuation, and therefore we believe
that substantially all accounts receivable are fully collectible. Accordingly, as of March 31, 2024 and 2023, our allowance for credit
losses was zero.
 
In
fiscal 2023, the Company has adopted an accounting standard: Adoption of ASC 326, Financial Instruments - Credit Losses, which amends
the impairment model by requiring entities to use a forward-looking approach to estimate lifetime expected credit losses on certain types
of financial instruments, including trade receivables
 
(H)
Inventory
 
Inventories
are recorded in accordance with Accounting Standards Codification (“ASC”) 330, Inventory, and are stated at the lower of
cost or net realizable value. We account for inventories using the first in first out (“FIFO”) methodology. Provisions for
inventory obsolescence are charged to Cost of Sales. There were no provisions for obsolescence for the years ended March 31, 2024 and
2023.
 
(I)
Property & Equipment
 
Property
and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged
to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual
values) over the assets estimated useful life of 3 to 5 years for production and computer equipment and furniture and 5 to 7 years for
leasehold improvements.
 
(J)
Patents and Trademarks
 
The
Company capitalizes direct costs for the maintenance and advancement of their patents and trademarks and amortizes these costs over the
lesser of the useful life of 60 months or the life of the patent. We evaluate the recoverability of intangible assets periodically by
considering events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.
 
(K)
Loss Per Share
 
Basic
loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period.
Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents
and potentially dilutive securities outstanding during the period.
 
The
Company had 7,768,946 warrants outstanding as of March 31, 2024, with varying exercise prices ranging from $1.20 to $6.67 per share.
The weighted average exercise price for these warrants is $3.29 per share. These warrants were excluded from the weighted average number
of shares because they are considered anti-dilutive.
 
The
Company had 32,000 restricted stock units outstanding as of March 31, 2024, which were excluded from the weighted average number of shares
because they are considered anti-dilutive.
 
The
Company had 1,509,122 options outstanding as of March 31, 2024, with varying exercise prices ranging from $1.39 to $2.79 per share. The
weighted average exercise price for these options is $1.98 per share. These options are excluded from the weighted average number of
shares because they are considered anti-dilutive.
 
The
Company had 3,562,817 warrants outstanding as of March 31, 2023, with varying exercise prices ranging from $1.20 to $5.63 per share.
The weighted average exercise price for these warrants is $5.05 per share. These warrants are excluded from the weighted average number
of shares because they are considered anti-dilutive.
 

F-8 
 

 
The
Company had 256,804 restricted stock units outstanding as of March 31, 2023, which are excluded from the weighted average number of shares
because they are considered anti-dilutive.
 
The
Company had 884,849 options outstanding as of March 31, 2023, with varying exercise prices ranging from $1.39 to $2.79 per share. The
weighted average exercise price for these options is $2.19 per share. These options are excluded from the weighted average number of
shares because they are considered anti-dilutive.
 
The
Company uses the guidance in Accounting Standards Codification (“ASC”) 260 to determine if-converted loss per share. ASC
260 states that convertible securities should be considered exercised on the latter of the first day of the reporting period’s
quarter or the inception date of the debt instrument. Also, the if-converted method shall not be applied for the purposes of computing
diluted EPS if the effect would be anti-dilutive.
 
(L)
Revenue Recognition
 
The
Company recognizes revenue in accordance with ASC 606 “Revenue from Contracts with Customers.”
 
The
Company derives revenue from the sale of its pet care products directly to its veterinarian customers in the United States. The Company
recognizes revenue when performance obligations under the terms of a contract with the veterinarian customer are satisfied. Product sales
occur once control or title is transferred based on the commercial terms. Revenue is recognized upon delivery to the customer, which
is when control of these products is transferred and in an amount that reflects the consideration the Company expects to receive for
these products. Shipping costs charged to customers are reported as an offset to the respective shipping costs. The Company does not
have any significant financing components as payment is received at or shortly after the point of sale.
 
The
Company entered into a Distribution Services Agreement (the “Agreement”) with MWI Veterinary Supply Co. (the “Distributor”)
on June 17, 2022. Contracts with the Distributor are evidenced by individual executed purchase orders subject to the terms of the Agreement.
The contracts consist of a single performance obligation related to the sale of our pet care products. Product sales occur once control
or title is transferred based on the commercial terms in the Agreement. Revenue is recognized upon delivery to the Distributor; payment
is due within 60 days. The Agreement provides for a distribution fee payable to the Distributor equal to 5% of gross monthly sales payable
in 45 days; the distribution fee is netted against revenue. The Agreement provides for a rebate payable to the Distributor based on annual
sales volume that is retroactively applied. The rebate is estimated under the expected value method and is netted against revenue. Sales
are subject to various right of return provisions; the Company uses an expected value method to estimate returns and has determined that
any returns would be immaterial as of March 31, 2024. As a result, there is no return liability recorded. Shipping and handling costs
are a fulfillment activity and are reported as cost of sales.
 
For
the year ended March 31, 2024 and 2023, the Company recognized revenue from product sales under the Agreement of $626,176 and $636,345,
respectively. This represents 65% and 69% of total revenues for the year ended March 31, 2024 and 2023, respectively.
 
Assets
and liabilities (included in accrued expenses) under the Agreement were as follows:
 SCHEDULE OF RECOGNIZED REVENUE ASSETS AND LIABILITIES


  
March
                                            31, 2024  
March 31, 2023 

Accounts receivable 
$18,669  
$81,510 

Rebate liability 
 57,264  
 28,000 

Distribution fee payable 
 7,583  
 5,187 

 
The
Company entered into a Distribution Services Agreement (the “Agreement”) with Covetrus North America LLC (“Covetrus”)
on December 18, 2023. Contracts with Covetrus are evidenced by individual executed purchase orders subject to the terms of the Agreement.
The contracts consist of a single performance obligation related to the sale of our pet care products. Product sales occur once control
or title is transferred based on the commercial terms in the Agreement. Revenue is recognized upon delivery to the Distributor; payment
is due within 60 days. The Agreement provides for a rebate payable to the Distributor based on annual sales volume that is retroactively
applied. The rebate is estimated under the expected value method and is netted against revenue. Sales are subject to various right of
return provisions; the Company uses an expected value method to estimate returns and has determined that any returns would be immaterial
as of March 31, 2024. As a result, there is no return liability recorded. Shipping and handling costs are a fulfillment activity and
are reported as cost of sales.
 
For
the year ended March 31, 2024, the Company recognized revenue from product sales to Covetrus of $105,637. This represents 11% of total
revenues for the year ended March 31, 2024. There was no accounts receivable from Covetrus at March 31, 2024.
 

F-9 
 

 
(M)
Research and Development
 
The
Company expenses research and development costs as incurred.
 
(N)
Fair Value of Financial Instruments
 
The
Company applies the accounting guidance under ASC 820-10, “Fair Value Measurements”, as well as certain related Financial
Accounting Standards Board (“FASB”) staff positions. This guidance defines fair value as the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers
the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants
would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
 
The
guidance also establishes a fair value hierarchy for measurements of fair value as follows:
 


 
●
Level
    1 - quoted market prices in active markets for identical assets or liabilities.

 
 
 

 
●
Level
    2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar
    assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs
    that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 
 
 

 
●
Level
    3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
    or liabilities.

 
The
Company’s financial instruments consist of accounts receivable, accounts payable, accrued expenses and note payable and accrued
interest. The carrying amount of the Company’s financial instruments approximates their fair value as of March 31, 2024, and March
31, 2023, due to the short-term nature of these instruments and the Company’s borrowing rate of interest.
 
In
instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy,
the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is
significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation
of the Company’s note recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market,
and (iii) contractual prices.
 
The
Company had no assets and liabilities measured at fair value on a recurring basis on March 31, 2024 and March 31, 2023.
 
(O)
Stock-Based Compensation
 
Stock-based
compensation is accounted for based on the requirements of ASC 718 – “Compensation – Stock Compensation” which
requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for
an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange
for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee
services received in exchange for an award based on grant-date fair value of the award. The Company has elected to recognize forfeitures
as they occur as permitted under Accounting Standards Update (“ASU”) 2016-09 Improvements to Employee Share-Based Payment.
 

F-10 
 

 
(P)
Income Taxes
 
The
Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are determined based upon differences between financial
reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a
deferred tax asset will not be realized.
 
As
required by ASC 450, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant
tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not
threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of
being realized upon ultimate settlement with the relevant tax authority.
 
The
Company is not currently under examination by any federal or state jurisdiction.
 
The
Company’s policy is to record tax-related interest and penalties as a component of operating expenses.
 
(Q)
Recent Accounting Pronouncements
 
The
Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effectiveness dates during the
periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted
accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported
financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company’s
financial management.
 
In
August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging
- Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s
Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP.
Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded
conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative
scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income
per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim
periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of
the standard on the consolidated financial statements.
 
In
June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial
Instruments,” which replaces the existing “incurred loss” model for recognizing credit losses with an “expected
loss” model referred to as the CECL model. Under the CECL model, the Company is required to present certain financial assets carried
at amortized cost, such as accounts receivable, at the net amount expected to be collected. The measurement of expected credit losses
is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts
that affect the collectability of the reported amount. The Company adopted this standard in the consolidated financial statements for
the twelve months ended March 31, 2024. The change had no impact on the Company’s financial statements.
 
We
believe the critical accounting policies (Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation)
involve the most significant judgments and estimates used in the preparation of the consolidated financial statements.
 
All
other newly issued but not yet effective accounting pronouncements have been deemed either immaterial or not applicable.
 
NOTE
2 – RECLASSIFICATION OF PRIOR YEAR PRESENTATION
 
Reclassification.
Certain prior period amounts have been reclassified to conform to current period presentation.
 
Certain
prior year amounts have been reclassified for consistency with the current year presentation in the Consolidated Statements of Operations
related to Total Cost of Sales to exclude certain research and development costs and added as an Operating Expense. There were no reclassifications
made to the Consolidated Balance Sheets, Consolidated Statements of Changes in Stockholders’ Equity or Consolidated Statements
of Cash Flows.
 

F-11 
 

 
NOTE
3 – INVENTORY
 
As
of March 31, 2024 and 2023, the Company had inventory of $390,076 and $370,283 respectively.
 
The
inventory components are as follows:
 SCHEDULE OF INVENTORY


  
March 31, 2024  
March 31, 2023 

Finished goods 
$35,442  
$13,159 

Work in process 
 20,289  
 53,398 

Raw materials 
 334,345  
 303,726 

Total Net 
$390,076  
$370,283 

 
NOTE
4 – PREPAID EXPENSES AND OTHER ASSETS
 
The
table below shows our prepaid expenses and other assets for the periods ending March 31, 2024 and 2023.
 SCHEDULE OF PREPAID EXPENSES AND OTHER ASSETS


  
March 31, 2024  
March 31, 2023 

Investor relations services 
$217,000  
$115,000 

Insurance 
 138,000  
 130,000 

Nasdaq and FINRA fees 
 67,000  
 63,000 

Trade shows 
 44,000  
 42,000 

Consulting 
 26,000  
 56,000 

Rent 
 25,000  
 20,000 

Software subscription fees 
 20,000  
 19,000 

Supplier advance 
 -  
 42,000 

Other 
 8,512  
 4,694 

Total 
$545,512  
$491,694 

 
NOTE
5–PROPERTY AND EQUIPMENT
 
The
components of property and equipment were as follows:
 SCHEDULE OF PROPERTY AND EQUIPMENT


  
March 31, 2024  
March 31, 2023 

Leasehold improvements 
$418,041  
$216,159 

Production equipment 
 661,204  
 577,067 

R&D equipment 
 25,184  
 25,184 

Computer equipment and furniture 
 144,817  
 121,732 

Total, at cost 
 1,249,246  
 940,142 

Accumulated depreciation 
 (427,590) 
 (309,290)

Total Net 
$821,656  
$630,852 

 
During
the year ended March 31, 2024 and 2023, depreciation expense was $118,300 and $104,631, respectively.
 
NOTE
6 – PATENTS AND TRADEMARKS
 
The
components of patents and trademarks, all of which are finite-lived, were as follows:
 SCHEDULE OF COMPONENTS OF PATENTS AND TRADEMARKS


  
March 31, 2024  
March 31, 2023 

Patents 
$3,870,057  
$3,870,057 

Trademarks 
 26,142  
 26,142 

Total at cost 
 3,896,199  
 3,896,199 

Accumulated Amortization 
 (3,866,100) 
 (3,857,550)

Total net 
$30,099  
$38,649 

 
During
the year ended March 31, 2024 and 2023, amortization expenses was $8,550 and $9,803, respectively.
 

F-12 
 

 
NOTE
7 – ACCRUED EXPENSES
 
The
components of accrued expenses were as follows:
 SCHEDULE OF COMPONENTS OF ACCRUED EXPENSES


  
March 31, 2024  
March 31, 2023 

Accrued payroll and related taxes 
$111,353  
$258,978 

Accrued expenses 
 131,677  
 188,666 

Accrued lease termination expense 
 -  
 332,238 

Total 
$243,030  
$779,882 

 
Pursuant
to a lease wherein our subsidiary, Gel-Del Technologies, Inc., was the lessee until and through the lease’s termination in fiscal
year 2018, the Company had recorded $332,238 as a potential payable to the lessor. During the year ended March 31, 2024, the Company
determined that this potential payable along with other vendor payables of $53,636 that were included in accounts payable have exceeded
the statute of limitations for payments despite the Company’s best efforts to pay, and was unable to do so. As a result, following
legal advise, a total of $385,874 of these payables were extinguished from the Company’s balance sheet at March 31, 2024 and included
in other income on the Consolidated Statement of Operations.
 
NOTE
8 – NOTE PAYABLE
 
In
January 2020, the Company entered into a lease amendment for our corporate office facility whereby the lease term was extended through
November of 2026 in exchange for a loan of $42,500. The note payable accrues interest at a rate of 6% per annum. At March 31, 2024 and
2023, the amount outstanding on the note was $20,528 and $27,351, respectively. At March 31, 2024, the Company classified $7,356 as a
current liability and $13,171 in other liabilities. At March 31, 2023, the Company classified $6,936 as a current liability and $20,415
in other liabilities.
 
In
October 2023 and amended in November 2023, the Company entered into a promissory note for $120,000. The note accrued interest at a rate
of 10% per annum. The principal and accrued interest were due in February 2024. The holder of the note had the option to convert the
principal and accrued interest into shares of the Company’s common stock at a conversion rate of $0.75 per share.
 
On
February 5, 2024, the note and accrued interest of $123,255 was converted into 164,340 shares of common stock.
 
In
March 2024, the Company entered into a convertible promissory note for $150,000. The note accrued interest at a rate of 10% per annum.
The principal and accrued interest were due in April 2024. The holder of the note had the option to convert the principal and accrued
interest into Units of the Company’s common stock and warrants at a conversion rate of $0,70 per Unit. On April 10, 2024, the company
entered into another promissory note for an additional $150,000 whereby the new principal balance was $300,000 with the same terms. On
April 29, 2024, the noteholder converted the $300,000 principal balance, along with $1,558 of accrued interest into Units, consisting
of 430,798 common shares, in addition to the Company issuing 430,798 warrants to purchase shares with a strike price of $1.50 per share
for a period of three years.
 
NOTE
9 – RETIREMENT PLAN
 
In
February 2021, the Company established a 401(k) retirement plan for its employees in which eligible employees can contribute a percentage
of their compensation. The Company may also make discretionary contributions. For the year ended March 31, 2024 and 2023, the Company
made contributions to the plan of $51,441 and $35,266 respectively.
 

F-13 
 

 
NOTE
10 – COMMITMENTS AND CONTINGENCIES
 
Lease
Obligations
 
We
lease property and equipment under operating leases, typically with terms greater than 12 months, and determine if an arrangement contains
a lease at inception. In general, an arrangement contains a lease if there is an identified asset and we have the right to direct the
use of and obtain substantially all of the economic benefit from the use of the identified asset. We record an operating lease liability
at the present value of lease payments over the lease term on the commencement date. The related right of use (‘‘ROU”)
operating lease asset reflects rental escalation clauses, as well as renewal options and/or termination options. The exercise of lease
renewal and/or termination options is at our discretion and is included in the determination of the lease term and lease payment obligations
when it is deemed reasonably certain that the option will be exercised. When available, we use the rate implicit in the lease to discount
lease payments to present value; however, certain leases do not provide a readily determinable implicit rate. Therefore, we must estimate
our incremental borrowing rate to discount the lease payments based on information available at lease commencement.
 
We
classify our leases as buildings, vehicles or computer and office equipment and do not separate lease and non-lease components of contracts
for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less
than one year on the Consolidated Balance Sheets.
 
None
of our lease agreements contain material restrictive covenants or residual value guarantees.
 
Buildings

 
The
Company entered into an eighty-four month lease for 3,577 square feet of newly constructed office, laboratory, and warehouse space located
in Edina, Minnesota in May 2017. The base rent has annual increases of 2% and the Company is responsible for its proportional share of
common space expenses, property taxes, and building insurance. This lease is terminable by the landlord if damage causes the property
to no longer be utilized as an integrated whole and by the Company if damage causes the facility to be unusable for a period of 45 days.
In January 2020, the Company entered into a lease amendment to extend the lease term through November of 2026 in exchange for receipt
of a loan of $42,500 recorded to note payable. The monthly base rent as of March 31, 2024, and 2023 was $2,340 and $2,294, respectively.
 
The
Company entered into a sixty-three month lease for 2,400 square feet of office space located in Edina, Minnesota in January 2022. This
lease will expire in March 2027. The base rent has annual increases of 2.5% and the Company is responsible for its proportional share
of common space expenses, property taxes, and building insurance. The monthly base rent as of March 31, 2024 and 2023 was $2,808 and
$2,740, respectively.
 
On
January 10, 2023, the Company entered into a new lease agreement for approximately 14,000 square feet of production and warehouse space
with a commencement date of April 1, 2023, which is when the control and right of use for this asset took place. The initial monthly
base rent is $8,420 and has annual increases of 2.5%. The Company is also responsible for its proportional share of common space expenses,
property taxes, and building insurance. The lease will terminate on June 30, 2033, and the Company has a renewal option for a period
of five years. The monthly base rent as of March 31, 2024, was $8,420.
 
Vehicles
 
We
leased vehicles for certain members of our field sales organization in the year ended March 31, 2024, under a vehicle fleet program whereby
the noncancelable lease is for a term of 48 months. The Company recognized an operating lease right-of-use asset for approximately $150,000
and corresponding and equal operating lease liability for the lessee. As of March 31, 2024, in addition to monthly rental fees specific
to the vehicle, there are fixed monthly nonlease components that have been included in the ROU operating lease assets and operating lease
liabilities. The nonlease components are not significant.
 

F-14 
 

 
Operating
lease expense for the years ended March 31, 2024, and 2023, was $79,381 and $81,531, respectively.
 
The
following is a maturity analysis of the approximate annual undiscounted cash flows of the operating lease liabilities as of March 31,
2024:
 SCHEDULE OF MATURITY OF ANNUAL UNDISCOUNTED OPERATING LEASE LIABILITY


  
   

2024 
$41,000 

2025 
 222,000 

2026 
 226,000 

2027 
 180,000 

2028 
 114,000 

2029 
 114,000 

Thereafter 
 519,000 

Total 
 1,416,000 

Less: amount representing interest 
 (222,000)

Total 
$1,194,000 

 
In
compliance with ASC 842, the Company recognized, based on the extended lease terms to June 2026, November 2026, March 2027, and June
2033, a treasury rate of 0.12%, 0.40%, 7.6%, and 4.39%, respectively, an operating lease right-of-use assets for approximately $1,194,000
and corresponding and equal operating lease liabilities for the leases. As of March 31, 2024, the present value of future base rent lease
payments based on the remaining lease terms and weighted average discount rate are approximately 4.7 years and 4.15%, respectively, are
as follows:
 
SCHEDULE OF BASE RENT LEASE PAYMENTS


  
   

Present value of future base rent lease payments 
$1,194,348 

Base rent payments included in prepaid expenses 
 - 

Present value of future base rent lease payments – net 
$1,194,348 

 
As
of March 31, 2024, the present value of future base rent lease payments – net is classified between current and non-current assets
and liabilities as follows:
 SCHEDULE OF LEASE CURRENT AND NON-CURRENT ASSETS AND LIABILITIES


  
   

Operating lease right-of-use asset 
$1,194,348 

Total operating lease assets 
 1,194,348 

  
   

Operating lease current liability 
 190,589 

Operating lease non-current liability 
 1,003,759 

Total operating lease liabilities 
$1,194,348 

 
Employment
Agreements
 
The
Company has employment agreements with its executive officers. As of March 31, 2024, these agreements contain severance benefits ranging
from one month to six months if terminated without cause.
 
Legal
Proceedings
 
David
Masters, a former employee, board member, and consultant to the Company, has threatened to file suit against the Company to recover in
excess of $2 million. Masters’ threatened litigation relates to allegations that the Company promised him additional compensation,
shares, warrants, and future employment while he was associated with the Company. The Company mediated these claims with Masters in 2022
and executed a mediated settlement agreement resolving these claims for a one-time payment of $180,000, to be effective upon execution
of a long form agreement containing these and other settlement terms. The parties appointed the mediator as arbitrator to resolve any
disputes arising during the drafting of the long form agreement on commercially reasonable terms. In early 2023, Masters commenced arbitration
to have certain terms in the long form agreement decided. The arbitrator issued an award setting the final terms of the agreement.
 
In
September 2023, Masters executed the long-term agreement, and the Company recorded a settlement expense of $180,000. The settlement was
paid in October 2023 and there are no further legal proceedings with David Masters.
 
NOTE
11 - GOING CONCERN
 
The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the Company as a going concern.
 

F-15 
 

 
The
Company incurred net losses of $10,955,295 for the year ended March 31, 2024, had net cash used in operating activities of $7,419,588
for the same period, and has an accumulated deficit of $82,799,324 on March 31, 2024. These conditions raise substantial doubt about
the Company’s ability to continue as a going concern for a period of at least twelve months after the date of issuance of these
financial statements. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s
ability to achieve a level of profitability and/or to obtain adequate financing through the issuance of debt or equity in order to finance
its operations.
 
Management
believes that the actions presently being taken to further implement its business plan will enable the Company to continue as a going
concern. While the Company believes in its ability to raise additional funds, there can be no assurances to that effect. The ability
of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and
raise additional funds.
 
These
financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
NOTE
12 – STOCKHOLDERS’ EQUITY
 
Equity
Incentive Plan
 
On
July 10, 2020, our Board of Directors unanimously approved the PetVivo Holdings, Inc “2020 Equity Incentive Plan” (the “2020
Plan”), which authorized the issuance of up to 1,000,000 shares of our common stock as awards under the 2020 Plan, subject to approval
by our stockholders at the Annual Meeting of Stockholders held on September 22, 2020, when it was approved by our stockholders and became
effective. On October 14, 2022, the stockholders of the Company approved the PetVivo Holdings, Inc. Amended and Restated 2020 Equity
Incentive Plan (the “Amended Plan”), which increased the number of shares of the Company’s common stock which may be
granted under the Amended Plan from 1,000,000 to 3,000,000. Unless sooner terminated by the Board, the Amended Plan will terminate at
midnight on July 10, 2030. The number of shares available to grant under the Amended Plan was 822,605 at March 31, 2024.
 
Employees,
consultants, and advisors of the Company (or any subsidiary), and non-employee directors of the Company will be eligible to receive awards
under the Amended Plan. In the case of consultants and advisors, however, their services cannot be in connection with the offer and sale
of securities in a capital-raising transaction nor directly or indirectly to promote or maintain a market for PetVivo common stock.
 
The
Amended Plan is administered by the Compensation Committee of our Board of Directors (the “Committee”), which has full power
and authority to determine when and to whom awards will be granted, and the type, amount, form of payment, any deferral payment, and
other terms and conditions of each award. Subject to provisions of the Amended Plan, the Committee may amend or waive the terms and conditions,
or accelerate the exercisability, of an outstanding award. The Committee also has the authority to interpret and establish rules and
regulations for the administration of the Amended Plan. In addition, the Board of Directors may also exercise the powers of the Committee.
 
The
aggregate number of shares of PetVivo common stock available and reserved to be issued under the Amended Plan is 3,000,000 shares, but
includes the following limits:
 


 
●
    
the
    maximum aggregate number of shares of Common Stock granted as an Award to any Non-Employee Director in any one Plan Year will be
    10,000 shares; provided that such limit will not apply to any election of a Non-Employee Director to receive shares of Common Stock
    in lieu of all or a portion of any annual Board, committee chair or other retainer, or any meeting fees otherwise payable in cash.

 
Awards
can be granted for no cash consideration or for any cash and other consideration as determined by the Committee. Awards may provide that
upon the grant or exercise thereof, the holder will receive cash, shares of PetVivo common stock, other securities or property, or any
combination of these in a single payment, installments or on a deferred basis. The exercise price per share of any stock option and the
grant price of any stock appreciation right may not be less than the fair market value of PetVivo common stock on the date of the grant.
The term of any award cannot be longer than ten years from the date of the grant. Awards will be adjusted in the event of a stock dividend
or other distribution, recapitalization, forward or reverse stock split, reorganization, merger or other business combination, or similar
corporate transaction, in order to prevent dilution or enlargement of the benefits or potential benefits provided under the Amended Plan.
 

F-16 
 

 
The
Amended Plan permits the following types of awards: stock options, stock appreciation rights, restricted stock awards, restricted stock
units, deferred stock units, performance awards, non-employee director awards, other stock-based awards, and dividend equivalents.
 
Convertible
Debentures
 
On
July 27, 2023, the Company issued convertible promissory notes (“Convertible Debentures”) in the aggregate amount of $550,000
to three accredited investors pursuant to debenture subscription agreements (“Debenture Subscription Agreement”). The Convertible
Debentures mature on January 26, 2024 (the “Maturity Date”), bear interest at a rate of 10% per annum and automatically convert
into shares of the Company’s common stock on the earlier of (i) the Maturity Date or (ii) upon the occurrence of certain events
prior to the Maturity Date, including, without limitation, the sale of common stock of at least $2 million.
 
On
August 11, 2023, the Company entered into Convertible Debenture Conversion Agreements (“Conversion Agreements”) with the
three debenture holders (“Debenture Holders”). Pursuant to the Conversion Agreements, each Debenture Holder agreed to voluntarily
and immediately convert the outstanding balance on their Convertible Debenture into shares of the Company’s common stock prior
to January 26, 2024, the maturity date of the Convertible Debentures, provided that the Company adjust the original conversion rate to
one share of the Company’s common stock for each $1.50 of principal (reduced from $1.60 in the Convertible Debenture) and pay an
amount equal to six months of interest (the “New Conversion Rate”) and grant warrants to the Debenture Holders providing
each Debenture Holder with the right to purchase the number of shares of the Company’s common stock issued to the Debenture Holder
in the conversion. The Debenture Holders converted $550,000 in Convertible Debentures and accrued interest of $27,500 into 385,000 shares
of the Company’s common stock and warrants (“Warrants”) to purchase an aggregate of 385,000 shares of the Company’s
common stock. The Warrants are exercisable any time on or after February 5, 2024 and prior to August 10, 2026 at an exercise price of
$2.00 per share.
 
As
a result of the inducement to the Debenture Holders to voluntarily convert the outstanding balance of their Convertible Debentures prior
to their maturity date, the Company recognized a loss on extinguishment of debt of $534,366. The loss is comprised of the value of the
warrants issued of $463,476, as determined by the Black Scholes model; the value of additional shares issued of $45,834 as a result of
the lower conversion rate to one share of the Company’s common stock issued and the additional interest of $25,056 which is the
amount of interest credited to the Debenture Holders over the actual interest earned of $2,444. The value of the warrants and additional
shares issued of $509,310 is reflected in the Consolidated Statements of Changes In Stockholders’ Equity.
 
On
February 5, 2024, Alan Sarroff, a related party, due to being a greater than 10% shareholder of the Company converted an outstanding
promissory note dated October 16, 2023, as amended on November 13, 2023 (the “Convertible Note”), in the amount of
$120,000,
plus accrued interest of $3,255
into 164,340
shares of the Company’s common stock. The maturity date of the Convertible Note was May
14, 2024, the interest rate was 10%
per annum and the effective conversion price was $0.75
per share.
 
Sale
of Common Stock
 
On
August 4, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with two accredited investors
(the “Investors”), pursuant to which the Company agreed to issue and sell to the Investors in a registered direct offering
(the “Registered Offering”) 1,200,002 shares (“Registered Shares”) of the Company’s common stock (the “Common
Stock”) at a price of $1.50 per share. Under the Purchase Agreements, the Company also agreed to issue and sell to the Investors
in a concurrent private placement (the “Private Placement,” and together with the Registered Offering, the “Offering”)
warrants to purchase an aggregate of 1,200,002 shares of Common Stock (the “Warrants”). Net proceeds from the Registered
Offering were $1,775,782, after deducting offering expenses of $24,218. The net proceeds were allocated between the common stock and
warrants based on the relative fair values which were $502,417 and $1,273,365, respectively. The Warrants are exercisable any time on
or after February 5, 2024 and prior to August 10, 2026 at an exercise price of $2.00 per share.
 

F-17 
 

 
On
December 6, 2023, the Company entered into a Private Offering (the “Purchase Agreement”) with five accredited investors (the
“Investors”), pursuant to which the Company agreed to issue and sell to the Investors in a direct offering 352,224 shares
of the Company’s common stock (the “Common Stock”) at a price of $0.90 per share. Under the Purchase Agreements, the
Company also agreed to issue and sell to the Investors in a concurrent private placement (the “Private Placement,” and together
with the Offering, the “Offering”) warrants to purchase an aggregate of 352,224 shares of Common Stock (the “Warrants”).
Net proceeds from the Offering were $317,000 offset by a stock receivable of $27,000 which was received in January 2024. The proceeds
were allocated between the common stock and warrants based on the relative fair values which were $145,820 and $171,180, respectively.
The Warrants are exercisable any time from the issue date and prior to December 9, 2026, at an exercise price of $1.50 per share.
 
On
February 2, 2024, the Company sold 1,386,469 units to thirteen investors, with each unit consisting of one share of restricted common
stock and one warrant to purchase one share of common stock, at a price of $0.90 per unit. In total the Company raised $1,247,819 pursuant
to the private offering of the units. The warrants are immediately exercisable, have an exercise price of $1.50 per share (and no cashless
exercise rights), and are exercisable until February 1, 2027.
 
Common
Stock
 
For
the year ended March 31, 2024, the Company issued 6,108,400 shares of common stock as follows:
 


i)
793,585
    shares in connection with the sale of stock in a registered direct offering which closed in April 2023 in exchange for proceeds of
    $2,182,359 net of offering costs of $88,765, at a price of $2.75 per share. The Company received $137,500 of those proceeds on March
    31, 2023. The Company recorded this in common stock to be issued at March 31, 2023, and moved it to common stock and additional paid-in
    capital upon the issuance of shares of common stock in April 2023.

 
 

ii)
From
    April 2023 through June 2023, 30,300 shares related to vesting of RSUs to John Lai, the Company’s Chief Executive Officer,
    in lieu of compensation valued as of $74,589;

 
 

iii)
From
    April 2023 through June 2023, 49,998 shares to service providers for consulting services valued at $123,078;

 
 

iv)
From
    July 2023 through September, 2023, 349,498 shares to service providers for consulting services valued at market on the date of grant
    of $740,978; 

 
 

v)
In
    August 2023, sale of 1,200,002 shares of common stock in exchange for proceeds of $1,775,782, net of offering costs of $24,218, at
    a price of $1.50 per share;

 
 

vi)
In
    August 2023, 385,000 shares issued in connection with the conversion of the Convertible Debentures totaling $577,500 including $27,500
    of accrued interest at a price of $1.50 per share;

 
 

vii)
From
    August 2023 through September 2023, 34,678 shares issued pursuant to two warrant holder’s cashless exercise of warrants for
    purchase of 63,584 shares of common stock at an average strike price of $1.34 per share;

 
 

viii)
From
    July 2023 through August 2023, 28,250 shares related to vesting of restricted stock units (“RSUs”);

 
 

ix)
In
    August 2023, 20,200 shares issued related to vesting of RSUs to John Lai, the Company’s Chief Executive Officer, in lieu of
    compensation valued at $41,006

 
 

x)
125,000
    shares in connection with the sale of stock in October 2023 in exchange for proceeds of $200,000;

 
 

xi)
(250,000)
    shares returned in October 2023 from a service provider for cancellation of consulting agreement valued at $537,500;

 
 

xii)
During
    November and December 2024, an aggregate of 674,000 shares were sold pursuant to the “At The Market” (ATM) agreement.
    Proceeds from the sales were $959,033 less offering expenses of $65,779 to arrive at net proceeds of $893,254;

 
 

xiii)
From
    October 2023 through December 2023, 167,004 shares in October 2023 to service providers for consulting services valued at market
    on the date of grant of $293,123;

 
 

xiv)
During
    October through December 2023, 11,250 shares related to vesting of RSUs;

 
 

xv)
During
    December 2023, 352,224 shares in connection with the sale of stock in exchange for proceeds of $290,000. 

 

F-18 
 

 


xvi)
In
    January 2024, 1,386,469 shares were sold through the sale of stock in exchange for proceeds of $1,247,819;

 
 

xvii)
During
    January through March 2024, 109,834 shares were issued related to vesting of RSUs;

 
 

xviii)
During
    January through March 2024, 324,000 shares were issued to service providers for consulting services valued at market on the date
    of grant of $423,216;

 
 

xix)
In
    February 2024, 164,340 shares were issued in connection with the conversion of a convertible note in totaling $123,255 including
    $3,255 of accrued interest at a price of $.75 per share;

 
 

xx)
During
    February 2024, 152,768 shares were sold in connection with the sale of stock in exchange for proceeds of $1,247,819.

 
For
the year ended March 31, 2023, the Company issued 961,859 shares of common stock as follows:
 


 
i)
24,217
    shares in July 2022 pursuant to a warrant holder’s exercise of warrants for purchase with a weighted average strike price of
    $1.33 per share for cash proceeds of $32,188;

 
 
 

 
ii)
24,447
    shares in August 2022 pursuant to a warrant holder’s exercise of warrants for purchase with a weighted average strike price
    of $1.41 per share for cash proceeds of $34,370;

 
 
 

 
iii)
25,000
    shares in August 2022 to service providers for consulting services valued at $49,920; and

 
 
 

 
iv)
177,184
    shares related to vesting of restricted stock units (“RSUs”), with 10,000 RSUs vesting in July 2022, 22,000 RSUs in August
    2022, 1,250 RSUs in September 2022, 11,250 RSUs in December 2022, 10,000 RSUs in January 2023 and 122,684 RSUs in March 2023;

 
 
 

 
v)
610,011
    shares in connection with the sale of stock in January 2023 in exchange for net proceeds of $1,389,245 at a price of $2.32 per share;

 
 
 

 
vi)
101,000
    shares in January 2023 to service providers for consulting services valued at $349,920.

 
The
Company received $137,500 on March 31, 2023, in connection with a stock offering that was completed in April 2023. The Company recorded
this in common stock subscribed for the year ended March 31, 2023, and moved it to capital stock and additional paid in capital upon
the issuance of shares of common stock in April 2023.
 
The
Company has issued shares of common stock to providers of consulting services which are reported in the Consolidated Statements of Stockholders’
Equity. The value of these shares is reported as a prepaid expense and are amortized to expense over the contractual life of the respective
consulting agreements. The amortization of stock issued for services as reported in the Consolidated Statements of Cash Flows was $442,559
and $399,840 for the years ended March 31, 2024 and 2023, respectively.
 
Time-Based
Restricted Stock Units
 
We
have granted time-based restricted stock units to certain participants under the Amended Plan that are stock-settled with common shares.
Time-based restricted stock units granted under the Amended Plan vest over three years. Total stock-based compensation expense included
in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows was $2,109,783 and $1,462,768 for the years ended
March 31, 2024, and 2023, respectively, of which time-based restricted stock units was $667,668 and $606,014 for the years ended March
31, 2024, and 2023, respectively. At March 31, 2024, there was approximately $56,000 of total unrecognized pre-tax compensation expense
related to time-based restricted stock units that is expected to be recognized over a weighted-average period of .5 years.
 
Our
time-based restricted stock unit activity for the year ended March 31, 2024, was as follows:
 SCHEDULE OF TIME BASED RESTRICTED STOCK UNITS


  
Units Outstanding  
Weighted 
Average 
Grant Date 
Fair Value
 Per Unit  
Aggregate
 Intrinsic
 Value (1) 

Balance at March 31, 2022 
 372,668  
$4.07  
$760,243 

Granted 
 60,600  
 2.89  
 - 

Vested 
 (177,184) 
 3.99  
 - 

Balance at March 31, 2023 
 256,084  
 3.85  
 643,209 

Vested 
 (198,584) 
 3.82  
 - 

Cancelled 
 (25,500) 
 3.77  
   

Balance at March 31, 2024 
 32,000  
$4.08  
$32,000 

 


1)
The
    aggregate intrinsic value of restricted stock units outstanding was based on our closing stock price on the last trading day of the
    period.

 

F-19 
 

 
Stock
Options
 
Stock
options issued to employees typically vest over three years and have a contractual term of seven years. Total stock-based compensation
expense included in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows was $2,109,783 and $1,462,768
for the years ended March 31, 2024, and 2023, respectively, of which stock options was $1,102,522 and $662,429 for the years ended March
31, 2024 and 2023, respectively. At March 31, 2024, there was approximately $1,087,401 of total unrecognized stock option expense which
is expected to be recognized on a straight-line basis over a weighted-average period of 1.6 years.
 
The
fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Annually, we make predictive
assumptions regarding future stock price volatility, dividend yield, expected term and forfeiture rate. The dividend yield assumption
is based on expected annual dividend yield on a grant date. To date, no dividends on common stock have been paid by us. Expected volatility
for grants is based on our average historical volatility over a similar period as the expected term assumption used for our options as
the expected volatility. The risk-free interest rate is based on yields of U.S. Treasury securities with maturities similar to the expected
term of the options for each option group. We use the “simplified method” to determine the expected term of the stock option
grants. We utilize this method because we do not have sufficient public company exercise data in which to make a reasonable estimate.
 
The
following table sets forth the assumptions used to estimate fair values of our stock options granted:
 SCHEDULE OF ESTIMATED FAIR VALUE ASSUMPTION


  
Year Ended March 31, 2024  
Year Ended March 31, 2023 

Expected term 
 6 years  
 7 years 

Expected volatility 
 75.9 - 95.7% 
 111.7% - 146.9%

Risk-free interest rate 
 3.46% - 4.52% 
 2.96% - 4.35%

Expected dividend yield 
 0% 
 0%

Fair value on the date of grant 
 $1.20 - $2.75  
  $1.87 - $2.79 

 
Our
stock option activity for the years ended March 31, 2024 and 2023 was as follows:
 SCHEDULE OF STOCK OPTION ACTIVITY


  
Options
 Outstanding  
Weighted-
 Average
 Exercise 
Price Per
 Share (1)  
Weighted-
Average
 Remaining
 Contractual
 Life  
Aggregate
 Intrinsic
 Value (2) 

Balance at March 31, 2022 
 195,000  
$1.56  
 6.9 years  
$100,200 

Granted 
 714,849  
 2.37  
    
   

Cancelled 
 (25,000) 
 2.46  
    
   

Balance at March 31, 2023 
 884,849  
 2.19  
 6.3 years  
$307,750 

Granted 
 822,605  
 1.77  
    
   

Cancelled 
 (198,332) 
 2.03  
    
   

Balance at March 31, 2024 
 1,509,122  
$1.98  
 5.7 years   
$— 

  
    
    
    
   

Options exercisable at March 31, 2024 
 572,415  
    
    
   

 


(1)
The exercise price of each option granted during the period
shown above was equal to the market price of the underlying stock on the date of grant.

 
 

(2)
The aggregate intrinsic value of stock options outstanding
was based on our closing stock price on the last trading day of this period. The closing stock price at the end of the period (March
31, 2024) was $1.07.

 
Stock
options granted for the year ended March 31, 2024 and 2023 were to employees and directors. The fair value of these options on the date
of grant was $1,107,799 and $984,552 for the year ended March 31, 2024 and 2023, respectively.
 
Options
exercisable at March 31, 2024, had exercise prices ranging from $1.39 to $2.79
 

F-20 
 

 
The
following summarizes additional information about our stock options:
 SCHEDULE OF ADDITIONAL INFORMATION ABOUT STOCK OPTIONS


  
Year Ended March 31, 2024  
Year Ended March 31, 2023 

Number of: 
    
   

Non-vested options, beginning of period 
 709,394  
 195,000 

Non-vested options, end of period 
 936,707  
 709,394 

Vested options, end of period 
 572,415  
 175,455 

 


  
Year Ended March 31, 2024  
Year Ended March 31, 2023 

Weighted-average grant date fair value of: 
    
   

Non-vested options, beginning of period 
$2.23  
$1.56 

Non-vested options, end of period 
$1.84  
$2.23 

Vested options, end of period 
$2.21  
$2.01 

Forfeited options, during the period 
$2.03  
$- 

 
Warrants
 
During
the year ended March 31, 2024 the Company issued warrants to purchase an aggregate of 4,386,463 shares of common stock as follows:
 


i)
1,200,002
    warrants in August 2023 in connection with the sale of stock in the Registered Offering valued at $1,273,365;

 
 

ii)
385,000
    warrants in August 2023 in connection with the conversion of convertible debentures to common stock valued at $463,476;

 
 

iii)
300,000
    warrants in August 2023 to service providers valued at $234,741;

 
 

iv)
80,000
    warrants in August 2023 to service providers valued at $87,485; and

 
 

v)
352,224
    warrants in December 2023 in connection with the sale of stock in a private offering

 
 

vi)
430,000
warrants in January 2024 in connection with the sale of stock in a private offering

 
 

vii)
1,639,237 warrants in February 2024 in connection with the sale of stock in a private offering
 
These
warrants’ values were arrived at by using the Black-Scholes valuation model with the following assumptions:
 SCHEDULE OF WARRANT’S USING BLACK-SCHOLES VALUATION


  
Year
    Ended 

  
March
    31, 2024 

Stock price on valuation date 
 $1.07
                                            - $2.15 

Exercise price 
 $1.20
                                            -$2.75 

Term (years) 
 2.0
                                            – 3.0 

Volatility 
 75.9%
                                            - 95.7%

Risk-free rate 
 3.46%
                                            - 4.52%

 
A
summary of warrant activity for the years ended March 31, 2024, and 2023 is as follows:
 SCHEDULE OF WARRANT ACTIVITY


  
Number of Warrants  
Weighted- Average Exercise Price  
Warrants Exercisable  
Weighted- Average Exercisable Price 

  
   
   
   
  

Outstanding, March 31, 2022 
 3,757,484  
$4.95  
 3,693,734  
$5.00 

Exercised for cash 
 (48,664) 
 (1.36) 
    
   

Granted and issued 
 -  
 -  
    
   

Cashless warrant exercises 
 - 
 - 
    
   

  
    
    
    
   

Expired 
 (146,003) 
 (3.70) 
    
   

Outstanding, March 31, 2023 
 3,562,817  
 5.05  
 3,540,317  
 5.07 

Granted and issued 
 4,386,463  
 1.80  
    
   

Cashless warrant exercises 
 (63,584) 
 (1.34) 
    
   

Expired 
 (16,750) 
 (4.18) 
    
   

Outstanding, March 31, 2024 
 7,768,946  
$3.29  
 7,768,946  
$3.28 

 

F-21 
 

 
On
March 31, 2024, the range of warrant prices for shares under warrants and the weighted-average remaining contractual life is as follows:
 SCHEDULE OF RANGE OF WARRANT PRICES


  
Warrants Outstanding  
Warrants Exercisable 

Range of Warrant  Exercise Price 
Number of Warrants  
Weighted- Average
 Exercise Price  
Weighted- Average Remaining Contractual
 Life (Years)  
Number of Warrants  
Weighted- Average Exercise Price 

$1.20-$2.00 
 4,189,952  
$1.63  
 2.80  
 635,713  
$1.43 

  
    
    
    
    
   

2.01-4.00 
 535,438  
 2.54  
 1.48  
 396,268  
 2.50 

  
    
    
    
    
   

4.01-5.63 
 3,043,556  
 5.63  
 2.61  
 3,043,556  
 5.63 

  
    
    
    
    
   

Total 
 7,768,946  
$    3.29  
 2.54  
 4,075,537  
$4.67 

 
Total
stock-based compensation expense included in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows was
$2,109,783 and
$1,462,768 for
the years ended March 31, 2024, and 2023, respectively, of which warrants were $339,644
and $41,662
for the year ended March 31, 2024 and 2023, respectively.
At March 31, 2024, there was no future unrecognized warrant expense.
 
NOTE
13 – INCOME TAXES
 
The
following table presents the net deferred tax assets as of March 31, 2024 and 2023:
 SCHEDULE OF DEFERRED TAX


  
2024  
2023 

Net operating loss carryforwards 
$10,786,000  
 8,311,000 

Stock compensation 
 1,539,000  
 933,000 

Other 
 74,000  
 118,000 

Total deferred tax assets 
 12,399,000  
 9,362,000 

Valuation allowance 
 (12,399,000) 
 (9,362,000)

Net deferred tax assets 
$—  
$— 

 
Current
income taxes are based upon the year’s income taxable for federal and state tax reporting purposes. Deferred income taxes (benefits)
are provided for certain income and expenses, which are recognized in different periods for tax and financial reporting purposes.
 
Deferred
tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the period in which the
differences are expected to affect taxable income. The Company’s deferred income taxes arise from the temporary differences between
financial statement and income tax recognition of net operating losses. These loss carryovers would be limited under the Internal Revenue
Code should a significant change in ownership occur within a three-year period.
 
At
March 31, 2024 and 2023, respectively, the Company had net operating loss carryforwards of approximately $37,500,000 and $29,000,000.
The deferred tax assets arising from the net operating loss carryforwards are approximately $10,786,000 and $8,311,000 as of March 31,
2024, and 2023, respectively. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax
liabilities, the projected future taxable income and tax planning strategies in making this assessment. Based on management’s analysis,
they concluded not to retain a deferred tax asset since it is uncertain whether the Company can utilize this asset in future periods.
Therefore, they have established a full reserve against this asset. The change in the valuation allowance during the years ended March
31, 2024 and 2023 was approximately $3,037,000 and $1,613,000, respectively. The net operating loss carryforwards, if not utilized, generally
expire twenty years from the date the loss was incurred, beginning in 2022, and losses incurred after 2019 are carried forward indefinitely
and subject to annual limitations for federal and state purposes.
 

F-22 
 

 
Of
the approximately $37,500,000 in net operating loss carryforwards, approximately $7,000,000 has been accumulated in our pre-merger operating
subsidiary, Gel-Del Technologies, Inc. IRC 382 provides guidance around whether or not the Company is able to utilize the pre-merger
Gel-Del Technologies, Inc. net operating loss of approximately $7,000,000. Management is currently analyzing whether or not these pre-merger
dollars will be allowable if our deferred tax asset is ever realized.
 
Income
tax expense (benefit) to the statutory rate of 21% for the years ended March 31, 2024, and 2023 is as follows:
 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION


  
2024  
2023 

Tax benefits at statutory rate 
 21.0% 
 21.0%

State income tax benefit, net of federal 
 7.7% 
 7.7%

Gross Effective Rate 
 28.7% 
 28.7%

Valuation allowance 
 (28.7%) 
 (28.7%)

Net effective rate 
 -  
 - 

 
The
Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As
of March 31, 2024 and 2023, the Company had no accrued interest and penalties related to uncertain tax positions.
 
The
Company is subject to taxation in the U.S. and Minnesota. Our tax years for 2020 and forward are subject to examination by tax authorities.
The Company is not currently under examination by any tax authority.
 
Management
has evaluated tax positions in accordance with FASB ASC 740, and has not identified any tax positions, other than those discussed above,
that require disclosure.
 
NOTE
14 – SUBSEQUENT EVENTS
 
From
April 1, 2024, through the date of this annual report 10K filing, the Company sold 1,889,434 units representing 1,889,434 shares of its
common stock in a private placement offering at a purchase price of $.70 per share, and 1,889,434 warrants to purchase shares of our
common stock with a strike price of $1.50 per share for a period of three years, with various closings from April 1 through May 31, 2024,
respectively. Net proceeds from the offering were approximately $1,322,600. There were no offering expenses with the private offering.
 
On
April 15, 2024, the company issued a restricted stock bonus of 150,000 shares of its common stock to our Chief Executive Officer, John
Lai with a value of $90,000.
 
On
April 29, 2024, the company converted $300,000 of a short-term loan, along with $1,558 of accrued interest into 430,798 units representing
430,798 shares of its common stock with a conversion price of $.70 per share and 430,798 warrants to purchase shares of our common stock
with a strike price of $1.50 per share for a period of three years.
 
From
April 10, 2024, through May 15, 2024, the company issued an aggregate of 376,000 restricted shares of our common stock to three investor
and public relations firms valued at $201,912.
 

F-23 

 


